ARTICLE
30 July 2024

M&A Transactions: Diligencing AI Issues With Target Companies

SM
Sheppard Mullin Richter & Hampton

Contributor

Sheppard Mullin is a full service Global 100 firm with over 1,000 attorneys in 16 offices located in the United States, Europe and Asia. Since 1927, companies have turned to Sheppard Mullin to handle corporate and technology matters, high stakes litigation and complex financial transactions. In the US, the firm’s clients include more than half of the Fortune 100.
Is your M&A target a company that develops or uses artificial intelligence ("AI") tools? AI, and generative AI technologies specifically, are powerful business tools but present...
United States Corporate/Commercial Law

Listen to this post

Is your M&A target a company that develops or uses artificial intelligence ("AI") tools? AI, and generative AI technologies specifically, are powerful business tools but present novel legal issues in the context of M&A transactions. It is increasingly important to identify and understand the unique legal risks associated with the use of AI technologies, tailor your diligence to investigate them and include AI-specific reps and warranties in your deal documents. To effectively do this, it is important to have someone well-versed in AI technology and the associated legal issues on the deal team. Many subtle issues, if not properly understood and addressed, can lead to liability and/or loss of business value. The attached article addresses the expansion of due diligence, beyond standard tech diligence, to include the analysis of AI tools developed or used by the target. It covers some of the key AI-specific legal issues to consider in M&A, but the issues in each transaction will be unique depending on the target company's involvement with AI. Once you understand the target company's involvement with AI, it is important to consider the unique legal issues and the diligence needed beyond the standard diligence questions.

Click here to read the full article.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

See More Popular Content From

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More