Big IT Players in the Race to Acquire Artificial Intelligence (AI) Assets

Hampleton Partners, the international technology M&A advisory firm, reveals that the three key AI sub-sectors: machine data analysis; natural language processing and machine vision, have all shown impressive growth rates over the past 24 months, but it is the machine data analysis category that is attracting most buyers, with half of all deals (49 percent).

The largest deal in machine data analysis in the first-quarter 2018 was Roche’s acquisition of Flatiron Health for $1.9 billion. This oncology-focused electronic medical records (EMR) company’s value lies in its ability to capture unstructured data and combine it with EMR to generate real-world evidence.

Machine data analysis includes business and data analytics, forecasting models, big data machine learning, statistics recognition and predictions.

The next biggest sector for AI-acquisitions is Machine Vision, with 31 per cent of deals over the past 24 months.  Video and image recognition and analysis are expanding into many sectors, from advertising to robotics and from physical security to healthcare analysis.

One active acquirer in this sector is Chinese tech giant Baidu, acquiring US start-up xPerception to help build its autonomous driving and augmented reality efforts, through object recognition and depth perception technology.

Overall, the number of artificial intelligence-related M&A deals has shown impressive growth year-on-year. Particularly encouraging for the long-term growth of the sector and future exits is the level of VC investment  . These investments focused particularly on robotic automation, autonomous vehicles (AV) and predictive analytics.

European acquirers are in a strong position moving forward in the AI sector, with a rise of all European targets being acquired by intracontinental buyers from 38 per cent in 1H 2017 to 44 per cent 1Q 2018. The high number of European M&A deals is a testament to Europe’s competitiveness in AI technology and recent commitments by national governments to back AI development further, augurs well for the sector as overall AI market size is forecast to grow from $21.46 billion in 2018 to $190 billion at a CAGR of 37 per cent. (1)

Heiko Garrelfs, director, Hampleton Partners, says: “It’s revealing to see that machine data analysis companies are being targeted most heavily by buyers, with the first quarter 2018 outperforming the first half of 2017. The IT giants fully understand the importance of AI to data analysis, enabled by massive data sets and cheap, readily available and scalable computing power that are combining to change their businesses fundamentally

“This promises a future exemplified by persistent, aggressive AI acquisitions by tech giants. A direction made clear recently by Google CEO Sundar Pichai, who now calls Google an “AI first” company and claims that AI will do more for humanity than fire or electricity. That means that AI will create new opportunities across all sectors, driving the next stage of global growth.”

Download the full Hampleton Partners AI M&A Market Report here for free: https://hampletonpartners.com/report/artificial-intelligence/2018/en

ENDS

Media Contact:

Jane Henry

jane (at) marylebonemarketing.com

+44 789 666 8155

Note to Editors:

Hampleton Partners’ M&A Market Reports are compiled using data and information from the 451 Research database (www.451research.com)

Hampleton Partners is at the forefront of international mergers and acquisitions advisory for companies with technology at their core. Hampleton’s experienced deal makers have built, bought and sold over 100 fast-growing tech businesses and provide hands-on expertise and unrivalled international advice to tech entrepreneurs and the companies who are looking to accelerate growth and maximise value.

With offices in London, Frankfurt and San Francisco, Hampleton offers a global perspective with sector expertise in: Automotive Technology, IoT, AI, FinTech, Hi-Tech Industrials & Industry 4.0, Cybersecurity, VR/AR, Healthtech, Digital Marketing, Enterprise Software, SaaS & Cloud, E-commerce. Download sector reports here.

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