In the last couple of years, leading technology companies including Accenture, Alphabet, Databricks, and Microsoft have been heavily investing to enhance their AI capabilities. While some companies have acquired AI companies to enhance their in-house capabilities, others have done so to amplify their organisational capabilities.
Transforma Insights has investigated the acquisition trends in AI and has created a database that includes 461 artificial intelligence (AI) acquisitions during the focus period of January 2021 to December 2023. If you want to know more about the report, click here: The State of AI Acquisitions 2021- 2023: Big Tech Leading the Charge.
Based on the key insights of the aforementioned report, this blog explores how the US alone dominates the AI M&A space, both in terms of the acquiring companies as well as the acquired companies.
Between 2021 and 2023, approximately 66% of the companies acquiring AI firms were headquartered in the United States, reiterating its dominance in the AI landscape. This group includes major technology giants such as Alphabet, Apple, Databricks, and Microsoft. Significant North American players in other sectors which also acquired other AI firms include healthcare providers such as R1 RCM and Becton, Dickinson and Co., and professional services firms like ZS Associates and Thomson Reuters.
In contrast, European buyers accounted for about 17% of deals, with prominent examples including Capgemini, Siemens, and The Weir Group. Last but not least, five Asian countries, India, Japan, Singapore, China, and South Korea represented approximately 8% of the total buyer base.
In terms of acquired companies, the US again tops the list. Almost 50% of all the AI startups that were acquired were headquartered in the United States. Europe collectively accounted for 30% of the total acquisition deals. Within Europe, with 30 deals, the UK had the highest number, followed by Germany with 17, France with 16, the Netherlands with 7, Sweden with 6, Finland with 5, and Denmark with 4. Among Asian countries, India has emerged as a notable player in the AI acquisition landscape, representing 6% of the total acquired companies.
To exemplify this further, the Alluvial Sankey chart below illustrates the correlation between the headquarters of the acquiring company and those of the acquired company, clearly demonstrating the dominant position of the US in both cases.
During the analysis period from 2021 to 2023, about 11% of the deals had a deal value greater than or equal to USD1 billion, 38% of deals had deal values between USD51 million USD1 billion, and 51% deals had a value less than equal to USD50 million.
Some of the prominent transactions during the period were:
It’s clear that the US leads the way in the AI acquisition market, with 66% of the firms making these deals and almost 50% of the acquired startups based there. This trend underscores the significant influence of American technology giants and highlights the contrasting positions of European and Asian markets in the evolving AI landscape.
