Artificial Intelligence Speeds Up Mergers and Acquisitions: Efficiency, Legal Risk and the Case for Human-Controlled Due Diligence

Abstract

Artificial intelligence is reshaping mergers and acquisitions (M&A), particularly the due-diligence phase in which parties examine a target company’s contracts, financial records, litigation exposure, intellectual property, data practices and regulatory compliance. AI-enabled systems can sort, search, classify and summarise very large document collections at a speed that conventional manual review cannot match. This can reduce transaction time, control costs and allow lawyers to focus on material risks and commercial judgement. Yet speed is not equivalent to legal reliability. AI systems may omit crucial provisions, generate incorrect summaries, reproduce bias embedded in their data, mishandle confidential material or provide outputs that cannot be adequately explained. These risks are serious because an M&A transaction allocates substantial financial, regulatory and reputational risk between buyer and seller.
This paper argues that AI should be treated as an assistive technology rather than an autonomous legal decision-maker. Its lawful and responsible use in M&A requires a framework of competent human supervision, validation of outputs, confidentiality safeguards, documented audit trails, vendor due diligence, and transaction documents that allocate AI-related risks expressly. The paper considers the relevance of the EU Artificial Intelligence Act, the General Data Protection Regulation (GDPR), professional duties of competence and confidentiality, and India’s Digital Personal Data Protection Act 2023. It concludes that AI can accelerate M&A without weakening legal due diligence only where lawyers retain responsibility for material conclusions and final advice.

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