Mergers and acquisitions (M&A) activity is set to accelerate in 2025, with investment banks turning to generative AI (GenAI) to streamline deal processes, according to a report.
The report by management consulting firm Bain and Company highlighted the rising adoption of AI in M&A, with 21% of practitioners now leveraging GenAI, up from 16% in 2023. More than half anticipate integrating AI tools into their workflows by 2027. AI solutions are being applied across a range of M&A functions, from deal sourcing and screening to due diligence, according to the report.
The impact of AI on deal volume is already visible. PwC data shows that deals exceeding $1 billion increased by 17% in 2024, with further growth expected in 2025. As transactions become more frequent and complex, investment banks are expected to rely more heavily on AI-powered efficiencies to stay competitive.
Victor Basta, managing partner at tech investment bank Artis Partners, advised both buyers and sellers to explore AI’s capabilities to optimise their dealmaking strategies. “It’s critical that dealmakers research and adopt emerging technologies, as failure to do so could result in firms falling behind competitors. However, a certain level of restraint is important, with the scope of work GenAI innovations are capable of handling far from exhaustive.”
Basta warned that while AI can streamline processes, M&A transactions cannot be fully automated. “M&A can’t be fully automated, as putting deals together is not the same as selling a financial product. There is too much money on the line, too much ‘choreography’ required and too much risk involved to put significant parts of any deal process in the hands of AI.”
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AI is also being leveraged to speed up due diligence by automating document iteration and ensuring consistency across multiple files. Despite these efficiencies, the core of M&A remains a human-centric process. “Strategic M&A is still very much a human endeavour, and often a once-in-a-lifetime event even for seasoned CEOs. Establishing strong relationships with potential targets remains essential, and this isn’t an area where GenAI can lead in any meaningful way,” he added.
Basta concluded that while the M&A market is rebounding, firms must be strategic in their AI adoption. “The M&A market is on a rebound, and people are primed to do deals. With the money flowing into special-purpose AI tools, the technology to automate the most laborious – and often least value-add parts of the process – is now becoming readily available. M&A firms must use AI to their advantage to complete deals faster, leveraging it as a tool to increase efficiency.”
