How AI Is Shaping the Valuation of Private Companies

Articles / Research Papers

Artificial Intelligence (AI) has rapidly become one of the leading factors in how investors and buyers are valuing private companies. While AI itself is not a new concept, the proliferation of generative AI, machine learning applications, and AI-enabled productivity tools has heavily influenced the financial and strategic drivers of valuations and re-shaped M&A transaction dynamics.

Key Takeaways

• AI integration has become a significant value driver in private company valuations.
• AI offers measurable financial and operational efficiency gains, leading to increased EBITDA margins and higher valuation multiples.
• The presence of proprietary AI assets in a company can command significant valuation premiums by being valued as intellectual property, creating competitive barriers to entry.

https://www.eisneramper.com/insights/artificial-intelligence-insights/artificial-intelligence-and-private-company-valuations-0925/

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