Manatt Corporate and Finance Partner Scott Schwartz and Litigation Partner Kishan Barot wrote an article for Law360 discussing the key issues that artificial intelligence (AI) companies and their acquirers should keep in mind as they engage in M&A activity.
The authors noted that AI startups and major tech companies alike will face greater regulatory scrutiny—and legal compliance costs—as new laws are passed governing the use of AI. This development, they explained, will justify increased consolidation in the AI space by strategic players.
Schwartz and Barot offered eight key issues industry players may face as M&A action accelerates, including:
- Wide Valuation Swings
- Earnouts and Related Litigation
- Heavily Negotiated Letters of Intent
- Buyer-Friendly Agreement Provisions
- Significant Chain-of-Title Diligence
- Talent Retention Agreements
- Post-Publicity Litigation
- Antitrust Scrutiny
Read the full article here.