AI in M&A: The Shift from Competitive Advantage to Governance Imperative

In this concise article, authors Donald G. Shelkey & A. Benjamin Klaber (Morgan Lewis & Bockius) offer an overview of how artificial intelligence is rapidly becoming central to M&A strategy and execution. No longer a peripheral tool, AI now shapes the full deal lifecycle—from sourcing and valuation to diligence and post-merger integration—making “AI readiness” a key driver of both competitive positioning and transaction value.

At the same time, the regulatory environment is evolving quickly across the United States, European Union, and United Kingdom, with increasing expectations around AI governance, transparency, and accountability. This shift is introducing new legal complexities for dealmakers, particularly around intellectual property rights in training data and outputs, as well as data privacy, liability allocation, bias, and cybersecurity risks. These concerns are increasingly addressed through tailored contractual protections, including AI-specific representations, warranties, and covenants.

The authors also highlight how AI is transforming deal execution itself, enabling faster, more efficient diligence, contract review, and integration planning while delivering deeper data-driven insights. However, they stress that AI is a “force multiplier,” not a replacement for human judgment, requiring robust governance frameworks and active oversight. As adoption accelerates, organizations must prioritize transparency, risk management, and internal policies to fully capture AI’s benefits while mitigating its risks…

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