WFS Market Spotlight: AI Enablement

Ivan Ruzic, Sr. Vice President, Corum Group

AI skill sets are scarce and demand for new business applications is ever-increasing.  How can you take advantage of the next wave in AI Enablement?  What’s changed, and what’s on the horizon?  Who are the buyers in AI M&A, which technologies are in high demand?

Click here to view the webcast on demand.

Key AI M&A Lessons 2017-2019

1. AI-related M&A accelerated through 2018 — but may have plateaued in 2019.  
2. M&A is still dominated by digital giants in Technology, Media & Entertainment and Telecoms (“TMT”) — influence is decreasing.
   • M&A by other non-TMT sectors is still at an early stage — but catching up quickly. Expected to surpass TMT in 2020.
3. Changes in buyer mix may limit window for AI “enablement” liquidity at strategic valuations — some evidence that:
   • Non-TMT buyers may not be prepared to pay the same strategic premium so prices may revert back to the long-term mean.

AI M&A Take Home For Sellers

1. For both groups, M&A appetite has shifted toward acquiring:
   • Application software, business productivity and network management companies.
   • AI-based cyber technology and a wider range of other AI technologies.
2. Buyers outside of TMT sector are still interested in acquiring Big-Data related AI capabilities.
   • “Enabled” applications were indeed a refuge for this buying cycle — this is a good place to be.
   • All things remaining equal, the remainder of 2019 and 2020 should be a good time to sell your AI company as more buyers enter the mix.
   • Best time during this cycle to secure strategic valuations is now.

Andrew Dubois, Chief Operating Officer, Tulco Labs

About Tulco Labs

• Based in Pittsburgh, Pennsylvania, Tulco Labs applies machine learning and data science to their portfolio of companies disrupting large industries that have yet to experience significant technical innovation.
• Portfolio includes a medical apparel company, a security company, as well as a waste management company.
• Expect consolidation in two areas of the AI enabled software space; where a company has a unique/valuable data set and where companies have a unique group of individuals with significant machine learning expertise in a market segment.
• There are generally two AI enablement camps; the Terminator model in which humans are replaced and the Ironman model in which the capacity of individuals is augmented allowing them to perform tasks much more rapidly and efficiently. I'm a fan of the latter and believe that this is where we will see the fastest growth over the next five to ten years.
• Tulco’s vision is to enter markets where we have a decided competitive advantage in technical acumen. One industry ripe for disruption is insurance.

Richard Yawn, Chief Technology Officer, KIM Technologies

About Kim Technologies

• KIM is a no-code automation as a service platform that currently services legal operations, contract life cycle management, and compliance. KIM services multiple areas, including banks, insurance and other forms in the legal space.
• KIM is maximizing business value by automating business solutions.
• AI enablement classically has been driven by ROI, TCO, & TTM, simply meaning better, faster, cheaper. It should include the additional driver of adaptation. Resulting in quick time to market for new solutions, adapting solutions to regulatory or business changes at pace, driving down cost.
• Further consolidation in AI will occur by combining RPA solutions with machine learning solutions into seamless capabilities.
• We don’t have to re-engineer for everything that we don’t know. With adaptation, whether the data, forms, services, business practices, or technology changes, AI solutions will work with us instead of against us.
• Growth opportunity is in the industries of insurance, court case management, social service, government, & legal industries are full of inefficiencies.
• KIM's architecture comes with more than 20 years of research and was designed to expand into other technical areas in the DAP business needs, cross-sector and cross-function.

Greg Pelton, Chief Product Officer, Pryon

About Pryon

• Pryon is an AI technology company focused on delivering augmented intelligence for the enterprise.
• Key strategic drivers for the adoption of AI:
  1. Technology must be fast and easy to onboard.
  2. AI is a very rapidly dynamic space.
  3. A few percentage points of accuracy can make or break adoption of a product.
• There is great interest in AI and money being invested means that there are too many companies for the market to support in the long term. Expect that many of these companies will not reach sustainability and will either be bought by larger companies or expire.
• Data volume is growing faster than the capabilities of human memory and recall. AI will need to not only anticipates the question but act on the answer.
• AI has the potential to remove inefficiencies by eliminating the complexity of dealing with large information sets and coordinating across large groups of people.

Click here to view the webcast on demand.

About World Financial Syomposiums

World Financial Symposiums (WFS) is an international organization dedicated to educating technology leaders. Renowned as the pre-eminent networking facilitator, WFS organizes and promotes forums, seminars and conferences for CEOs, CFOs, corporate investors and other deal participants for software and IT industries worldwide, with the intent to educate and encourage deal flow among industry colleagues. The firm’s one-day, flagship symposium, Growth and Exit Strategies for Software and IT Companies, is held around the world throughout the year and the 30-minute Market Spotlight Series webcasts are held monthly. Visit www.wfs.com to see our schedule of upcoming events or to view previous Market Spotlights on demand.