Companies use acquisitions as a strategy for a various reasons. Some purchase others for tactical reasons like entry into new markets, products, or services. Others do it to obtain economies of scale, benefits, or portfolio diversification. Acquisitions can also be reactions to specific market changes to stay on top of the competition. Acquisitions tend to occur when the market starts offering new revenue opportunities and that’s why technological niches have a huge demand among every industry.
In recent times, the AI world has seen large-scale acquisitions within the niche. One of the latest ones being Microsoft Corp’s acquisition of the leading conversational AI Nuance Communications Inc. The AI is known to have intelligence across industries including healthcare, retail, financial services, and telecommunications, making it a huge acquisition.
And it isn’t specific to Microsoft alone. We take a closer look at other tech giants like Facebook, Amazon, Google, and Apple who have all adopted aggressive acquisition strategies in the last decade. Apple has made over 20 acquisitions since 2010, followed by Google which made 14 and Microsoft making 10 in what the world is seeing to be an AI race.
Google recently acquired the semiconductor IP company Provino Technologies, which develops interconnect protocols for consumer security appliances. Apple’s acquisition of the AI company RealFace led to the development of features like FaceID in iPhones. Facebook acquired a London-based computer vision start-up called Scape Technologies to build on its LiveMaps feature through an AI-driven AR and VR mapping. Amazon also acquired Zoox at an estimated deal of US$1.2 billion to develop on self-driving cars and revolutionise the company’s delivery infrastructure.
In fact, many of the products and services are being developed out of major AI acquisitions by the leading tech companies like Apple’s Siri and Google’s contribution to healthcare through DeepMind. Other top acquirers include crucial tech companies like Intel, IBM, Twitter, and Salesforce. That being said, these tech giants aren’t the only ones undertaking large-scale acquisitions in the AI world.
Since 2010, there have been more than 600 acquisitions by companies seeking to build on their AI capabilities. These large-scale acquisitions have been growing at an increasing rate, and it’s just the beginning. There is a growing diversity in acquirers. AI was once within the exclusive territory of the major tech giants but smaller start-ups are now becoming acquisition targets in the insurance, retail, and healthcare industries.
At the same time, the AI world is growing. The explosion of big data created a need for technology-based solutions to control, organise and analyse all the information that was beginning to collect. Companies thrive on huge amounts of data and acquiring AI deals allows for businesses to understand the data and make organisational decisions at a competitive pace.
Technological advancements are motivating tech giants and upcoming corporations to identify future breakthroughs to improve their goods and services for customers. Acquisition of AI is breaking through the barriers that otherwise held them back from reaching their maximum potential. The best tech minds are jumping at the chance to accelerate their product development, spanning their reach across billions of consumers and enterprises. As digital transformation accelerates, organizations across sectors are finding benefits in large scale acquisitions in the AI world and leading the AI race that the world is coming to see.