Artificial intelligence (AI) is becoming increasingly essential to performing many daily business tasks, and is now making its way into the mergers and acquisitions (M&A) world. A typical M&A transaction is document-heavy, data-driven, and time-sensitive, with parties working toward a targeted closing date under significant pressure. In this context, AI can be a driver of efficiency and a true difference maker.

While AI is powerful, it does not replace the role of attorneys or advisors; instead, AI allows legal teams and deal professionals to focus on strategy and negotiation while AI handles repetitive and time-consuming volume work.

Accelerating Due Diligence

Due diligence has traditionally been one of the most labor-intensive aspects of M&A. Attorneys and analysts review commercial contracts, leases, employment agreements, non-disclosure agreements, intellectual property, insurance policies, and other documents to identify key information and potential risks. AI has made this process significantly faster and more precise.

AI-powered tools can rapidly analyze thousands of documents, flagging key clauses such as change-of-control provisions, anti-assignment clauses, most-favored nation clauses and non-compete restrictions. This expedites first-level review and ensures that lawyers can spend their time interpreting risks and applying judgment rather than simply locating them.

A particularly impactful innovation is the AI-powered data room. Unlike a traditional virtual data room that merely stores documents for a deal, an AI-powered data room automatically tags, indexes, and categorizes uploaded files. Attorneys can then search for items such as “show me all contracts that expire in the next six months” or “show me all contracts that have a non-compete provision.”

Benefits of AI-powered data rooms over traditional data rooms include:

• Faster review cycles – due diligence that once took weeks can often be completed in days.
• Cost efficiency – clients spend less on manual document review.
• Risk identification – AI highlights red flags such as pending litigation or unfavorable contract terms.
• Summarization – AI can generate concise overviews of large document sets.

By streamlining due diligence, AI reduces costs and improves accuracy, while still leaving attorneys in control of interpreting findings, advising clients on business and legal implications, and preparing and negotiating transaction documents.

Deal Structuring and Negotiation

One of the earliest decision points in a transaction is whether to pursue an asset deal, a stock deal, or strategic merger. AI tools can model the impact of different deal structures and forecast tax, regulatory and accounting implications.

Additionally, AI can pull market precedents and comparable deal terms, providing attorneys and clients with valuable information to use during negotiations. This ensures that dealmakers are entering discussions with a clear picture of what is “market” while still leaving space for strategic negotiation.

Post-Acquisition Integration

Post-acquisition integration is often one of the most complex parts of a deal. After the closing of a transaction, AI can analyze HR, IT, and finance systems to identify redundancies, highlight integration challenges, and uncover cost-saving opportunities. AI-driven surveys and sentiment analysis tools can determine employee feedback to detect items such as morale, attitudes, or cultural friction between merging companies. This gives leadership insight into potential retention risks and helps companies plan smoother transitions and minimize disruption.

Risks and Considerations While Using AI

While AI offers significant advantages, it is not without limitations. Clients and attorneys should remain cautious about over-reliance on AI in high-stakes deals. While AI can flag an issue, it can’t interpret business context or assess negotiation leverage – this remains the role of deal attorneys. It is also important to note that AI-powered data rooms are only as good as the data they’re trained on. They may miss unusual but important issues if they fall outside of standard patterns. Attorneys need to guide their clients to use AI responsibly – leveraging its speed and efficiency while also applying human judgment to interpret, negotiate, and advise.

AI is transforming the M&A landscape, from due diligence to deal structuring to post-acquisition integration. It speeds up routine tasks, reduces costs and provides insights that help parties move with greater confidence. However, technology does not replace the need for skilled legal counsel. The most effective transactions will combine the efficiency of AI tools with the strategic guidance of experienced attorneys who understand not only the transaction documents, but also the broader business and legal implications of every decision. AI is a powerful assistant in M&A, but attorneys remain indispensable guides.

For questions about the role of AI in M&A, contact Mark Fazio or Jacqueline Caserio.