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New improvements in Artificial Intelligence (AI)can help M&A teams to identify patterns, frauds, accounts manipulation and market feedbacks to M&A deals. In other side new world is world of Big Data atmosphere. Data science tools can help transactions use the hidden beneficial data among such big data that standard procedures never explore them.
I’m currently not aware of AI tools that would significantly affect DD process. I could imagine that for Commercial DD, AI could become useful CDD not only focus on the target but also its market environment.
I agree that AI can help identify patterns and fraud etc. I know during the DD process, the company that is being acquired need to open up its books. But I’m not sure, if they would actually let a data scientist to get control of all the data to do analytics. This is because the deal is not signed yet – and the acquiring firm may back out. Opening the books makes one feel vulnerable
Artificial intelligence due diligence is the practice of applying machine learning and AI tools to supplement and enhance the task of conducting due diligence before and during the execution of a purchase.
Insights can be gleaned from a multitude of data by using AI technologies, which process documents and data points with the same speed and accuracy as a human. Assessment of compliance and risk, information synthesis, information analysis, and discovery are the main applications for AI due diligence.
Data scientists can develop hundreds or thousands of variations of models with various prediction features with the assistance of artificial intelligence, then run iterative simulations to select the optimal variation ultimately. AI and data scientists work together to build the finest iterations. No matter how sophisticated an algorithm is, a dynamic, multi-faceted decision process gained through automation will surpass it because it can automatically test, iterate, and monitor data quality, incorporate new data points as they become available, and react wisely to events in real time.
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I believe that AI can definitely improve the efficiency of certain areas of the DD, but also think that it is limited in other once. Whereas it might be helpful if in the context of commercial DD AI can be used for e.g. product date in the VDR (if allowed), I believe that e.g. for a legal DD the AI standard is not yet on a level that can really help gaining efficiency. Maybe for standard contracst but the really decisive contracts normally are relatively specific an need to be analyzed by “real” experts.
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