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AI Due Diligence: What to Assess Before Acquiring an AI Company

AI companies have unique liabilities: model risk, data rights, and inference economics.

By Richard Ewing·

AI-Specific Diligence

Model Risk: How accurate is the model? What's the evaluation framework? When was it last retrained? What's the drift rate?

Data Rights: Do they own the training data? Are there licensing restrictions? GDPR/CCPA compliance for personal data?

Inference Economics: Cost per prediction? Revenue per prediction? Margin at current scale? Margin at 10x scale?

Team Risk: ML researchers are notoriously hard to retain post-acquisition. Budget 30-50% salary increases for retention packages.

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Published Work

This article expands on ideas from my published work in CIO.com, Built In, Mind the Product, and HackerNoon. View published articles →

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Richard Ewing

The Product Economist — Quantifying engineering economics for technology leaders, PE firms, and boards.