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Leveraging AI Systems for Mergers and Acquisitions

Companies involved in mergers and acquisitions appreciate how time-consuming these activities can be. This is especially true for larger companies that have literally thousands of existing contracts and policies. Any one of these could pose potential obstacles in reaching a negotiated agreement. Failure to identify such issues can be costly and lead to a variety of problems later. Yet, investing adequate time and resources into these pursuits is also burden companies involved as well. These are a few of the reasons many companies are turning to AI systems for mergers and acquisitions.

Artificial intelligence and robotics are being used in a variety of industries to facilitate higher quality, efficiency, and cost-effectiveness. The use of AI in healthcare, education, and manufacturing are just a few industries in this regard. Therefore, it’s perhaps not surprising that many companies are embracing technology with AI acquisitions. The use of these systems offers a number of advantages that traditional strategies don’t. This is a big reason why AI acquisitions and mergers are becoming more and more common. Companies that fail to see the benefits of this technology will soon be at a competitive disadvantage.

“[Our AI systems] derive structure from chaos. For example, we can tell what are the tables, price lists, clauses, and charts. We look at that with the robot and transfer it into structured data. What we do very well is having the ability to understand every little bit of the contract.” – Peter Wallqvist, CEO and Co-founder of Ravn

A Changing Merger and Acquisition Landscape

Traditionally, most mergers and acquisitions are relationship-focused. They consist of many handshakes, conferences, negotiations, and face-to-face conversations. But that notably changed with the pandemic. Companies considering mergers or acquisitions had to adapt to new tools. Videoconferencing and work-from-home environments replaced travel and in-person meetings. (Dive deeper into how innovation has reshaped videoconferencing technology in this Bold story.) In essence, the pandemic accelerated the digital transformation of many industries. Thus, it’s not that surprising that companies began evaluating AI systems for mergers and acquisitions as well.

AI mergers and AI acquisitions differ in many ways from traditional procedures. Instead of having legal teams sift through thousands of files over months, AI systems for mergers and acquisitions can accomplish this in hours to days. In fact, statistics show that AI acquisitions reduce attorney review time by as much as 95 percent. Using machine learning, statistical methods, and algorithmic processing, AI systems can examine massive amounts of data. For larger companies, AI acquisitions software can therefore save them handsomely in both time and money. This is why so many firms are making the switch.

“Companies and their lawyers often have to perform a cost-benefit analysis in areas like legal due diligence. [The challenge is whether to] perform a partial review of a database of documents and keep costs low, or perform a thorough review and blow through the budget.” – Adam Nguyen, Co-founder and Senior VP of eBrevia

Major Advantages of AI Mergers and AI Acquisitions

AI systems for mergers and acquisitions notably save time and money. However, these are not the only benefits of these systems. One of the most important advantages involves the ability to take emotions out of decision-making. By allowing AI acquisitions and mergers to proceed, data is analyzed objectively rather than subjectively. Inherent biases and opinions not substantiated by fact is removed from the situation. As a result, these systems allow firms to make better choices about whether they should proceed or not.

A bunch of executives drinking coffee and discussing growth
Mergers and acquisitions is an important facet of corporate growth, and the use of artificial intelligence is driving innovation in the space.

In addition to better decision-making information, AI systems for mergers and acquisitions also improve overall transparency. When companies agree to utilize artificial intelligence, they permit a more thorough and comprehensive analysis of the situation. This has notable benefits concerning risk mitigation and the detection of bias. The possibility that problematic terms or contracts are identified increase. Likewise, these systems can generally find potential liabilities or regulatory issues to a greater extent. These are added perks that AI mergers and AI acquisitions offer in their analysis.

“AI classifies and organizes data faster, better and cheaper, and augments human intelligence. It empowers people to make use of huge amounts of data to make better decisions and tell better stories.” – Jay Leib, Co-founder and Executive VP of NexLP

A Blossoming AI Mergers and AI Acquisitions Field

Over the last several years, a number of businesses have launched that offer AI systems for mergers and acquisitions. These systems are designed to address many different aspects of the entire AI process. Notably, when companies are considering mergers or acquisitions, several functional areas of the businesses must be evaluated. This not only includes existing contracts of both companies and their basic organizational structures. But it also includes data analysis of human resources, finances, R&D, asset management and operations. By using AI mergers and AI acquisitions software, these areas can be evaluated faster and more completely.

Understanding this, a variety of businesses now offer various AI systems for mergers and acquisitions. For example, Recommind provides an open text end-to-end eDiscovery AI system to assist with extensive file analyses. Another company, Kira, offers total due diligence assessments for companies entertaining mergers and acquisitions. And eBrevia utilizes AI mergers and AI acquisitions programs to perform contract analysis in multilingual formats. This is important for international mergers and acquisitions. Depending on a specific company’s needs in these areas, a variety of AI systems for merger and acquisitions now exist.

Less Time, Less Cost Means Better Resource Use

In traditional analyses for mergers and acquisitions, attorney costs can comprise as much as 30 percent of the total. Due diligence tasks in these areas account for a large chunk of time and money. However, the use of AI systems for mergers and acquisitions reduces these anywhere from 30 to 90 percent. As a result, companies enjoy opportunities to invest more into other productive areas. AI mergers and AI acquisitions programs can also identify roadblocks early that allow companies to abort negotiations. Given the advantages these systems provide, it’s not surprising they are being increasing leveraged. In fact, this is rapidly becoming the industry standard for those routinely involved in mergers and acquisitions.

 

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Elon Musk and Bitcoin – A Conflict of Interest or the Future of Cryptocurrency?

Over the last few weeks, Elon Musk seems to be having a bit of fun with Bitcoin. With one tweet, Musk sends Bitcoin ‘s prices trading at record levels. Then with the next, the cryptocurrency sees its value crash. One moment, Musk announces Tesla will be accepting Bitcoin for sales. The next, he pulls back the offer, citing the poor sustainability of cryptocurrency mining. Given that cryptocurrency isn’t highly regulated, Musk could make a fortune timing his tweets with his company’s stock activities. But in all likelihood, that’s not the primary issue that Musk and Bitcoin face.

It’s well known that Bitcoin and others have a cryptocurrency mining problem. Issues related to sustainability of cryptocurrency practices have caught the eye of many, including Musk. As the demand for Bitcoin and other cryptocurrencies have increased, so has mining practices. And since cryptocurrency mining absorbs a sizable amount of energy, individuals and agencies alike are calling for change. Thus, sustainability of cryptocurrency issues lies at the heart of Musk’s tweets. And it’s also something Bitcoin needs to address if they plan on maintaining market advantage.

“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel. Cryptocurrency is a good idea on many levels, and we believe it has a promising future, but this cannot come at great cost to the environment.” – Elon Musk, CEO and Founder of Tesla

The Sustainability of Cryptocurrency Problem

Once upon a time, there was a debate as to whether cryptocurrency had staying power. The debate has since vanished. Cryptocurrency offers many advantages that will guarantee its future, including faster, cheaper and more reliable transactions. Major companies are investing heavily in cryptocurrencies as well. That not only includes companies like Tesla but also PayPal, Visa, and Square. And there are increasing options for cryptocurrency with Bitcoin being among the best known. But currently, they all face sustainability issues when it comes to energy use that needs to be addressed.

A bunch of Teslas ready to crash somewhere
What’s the future of cryptocurrency? With Elon Musk no longer allowing Bitcoin to be used for Tesla purchases, that future is shaky.

Musk and Bitcoin both recognize the potential for cryptocurrency in the future. They also realize that issues surrounding sustainability of cryptocurrency stand in the way of that potential. In order to generate enough cryptocurrency to meet demand, mining procedures must take place that consume huge amounts of electricity. (Read more about the energy-consumption downside to cryptocurrency in this Bold story.) At the present time, cryptocurrency mining relies heavily on non-sustainable energy sources, including fossil fuels like coal. These energy resources impose serious threats to the climate that make the sustainability of cryptocurrency questionable. This is why Musk and Bitcoin have temporarily parted ways.

“I would definitely expect reduced appetite going forward. First, because of the loss of momentum from a technical perspective, but also because of the extreme sensitivity on environmental issues.” – Felix Dian, Founder of MVPQ Capital, London

Ideological Differences Between Musk and Bitcoin

In order to delve into the sustainability of cryptocurrency issue a bit more, it’s important to appreciate underlying motivations. For Musk, he co-founded PayPal and understands currency markets quite well. But after selling PayPal, he wanted to pursue sustainable transportation solutions that he believed was imperative. This has led him to introduce the world to Tesla Motors, offering fully-electric, high-performance, luxury cars. It also allowed him to revolutionize the space industry through reusable rockets and rocker boosters with SpaceX. Thus, despite Musk and Bitcoin sharing common interests in currency innovations, the similarities stop there.

Bitcoin started without a particular focus on the long-term sustainability of cryptocurrency. Instead, it was launched as an open-source software in 2009 by a group of unknown founders. Using blockchain protocols, Bitcoin was more focused on decentralizing a digital currency that could be readily validated. In doing so, it could revolutionize currency industries while enhancing transactions across the globe. But as Bitcoin and other cryptocurrencies grew, so did their carbon footprint. And while some cryptocurrencies are trying to address these issues, Bitcoin has not yet done so. This is where Musk and Bitcoin have a key underlying philosophical difference.

“We take a longer view, and investors would be right to do the same. The key question is whether we think [Bitcoin] is going to last? The answer is yes.” – Greg King, CEO of Osprey Funds

The Future of Cryptocurrency

Since February of this year, Bitcoin’s electricity consumption rose 163 percent as its stock prices increased. This is what grabbed Musk’s attention, and it also triggered concern industry-wide about the sustainability of cryptocurrency. Currently, a New York legislative bill is being considered that would prohibit further cryptocurrency mining until further evaluations. Likewise, many cryptocurrencies are exploring the use of renewable energy sources. The Twitter drama between Musk and Bitcoin is therefore being used to evoke change that might be beneficial.

One organization pursuing better sustainability of cryptocurrency is the Cryptocurrency Climate Accord. This group has over 40 supporters that want Bitcoin to be powered by 100% renewable energy by 2025. They are also working toward standards within this sector for energy use that both Musk and Bitcoin could accept. In addition to these pursuits, other alternatives to the current high-energy-consuming blockchain protocols exist. One involves XRP Ledger, which does not require proof-of-work and is 120 times more energy efficient.

Mixed Signals from Musk

The sustainability of cryptocurrency issue between Musk and Bitcoin has been highly publicized as of late. But that doesn’t mean Musk is down on cryptocurrency in general. For one, he has stated he is working with Dogecoin developers to improve their platforms and protocols. Tesla also continues to have $1.5 billion in Bitcoin investments. Thus, despite his concerns about the sustainability of cryptocurrency, it appears Musk still believes in its future. Recent tweets may simply be his way of getting others’ attention to encourage change that is climate friendly. If this is the case, then the saga between Musk and Bitcoin is far from over.

 

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