Artificial Intelligence M&A Trends: Spring 2024
Published April 29, 2024
Artificial Intelligence Sector Recap
AI became a household name following the launch of ChatGPT in November 2022. This was followed by a surge of AI enterprise adoption in 2023, as companies began to explore its potential. Now with the foundation laid, 2024 is shaping up to be another landmark year for AI as users begin to unlock and understand the true potential of AI, its broad set of applications, and actively integrate its capabilities in practical and transformative ways. The global market for AI boomed in 2023, reaching a value of $204B. This represents a significant 51% YoY growth and the market is expected to continue to expand rapidly at a CAGR of 24% through 2030.
Artificial Intelligence M&A Trends
Artificial Intelligence Sector Recap
AI became a household name following the launch of ChatGPT in November 2022. This was followed by a surge of AI enterprise adoption in 2023, as companies began to explore its potential. Now with the foundation laid, 2024 is shaping up to be another landmark year for AI as users begin to unlock and understand the true potential of AI, its broad set of applications, and actively integrate its capabilities in practical and transformative ways. The global market for AI boomed in 2023, reaching a value of $204B. This represents a significant 51% YoY growth and the market is expected to continue to expand rapidly at a CAGR of 24% through 2030.
Explosive AI Market Growth Driven By Increasing Adoption and Growing Use Cases
Explosive Global AI Market Size Growth…
…Driven by Increasing Interest in And Adoption of AI…
Google search interest over time for selected terms
Time to reach 100M users for selected applications
…And a Growing Number of AI Technology Supported Use Cases
Machine Learning
Applications and systems that use algorithms to help machines understand, learn, and improve from data to make predictions.
Natural Language Processing
Applications that enable computers to interpret, manipulate, comprehend, and generate human language.
Computer Vision
Applications that enable computers to interpret and derive information from images, videos, and other inputs.
Autonomous & Sensor Technology
Systems and machines that operate independently by using sensors, AI, and machine learning to monitor and respond to changes in their environment in real-time.
AI Robotics
The combination of AI, machine learning, and engineering to create intelligent machines that can process information, make decisions, and perform tasks autonomously.
Generative AI
AI that leverages algorithms and deep-learning models to generate text, images, code, simulations, audio, videos, and other content based on the data it was trained with.
Source: PitchBook, Statista, Google Trends, Meridian Research
Selected Notable Artificial Intelligence Sector M&A Activity
Highlighted AI Infrastructure M&A Transaction
Hewlett Packard Enterprise Acquires Juniper Networks
Jan 2024
EV
$14.5B
EV/Revenue
2.6x
Target Description: Juniper Networks provides networking solutions, services, and software that helps organizations securely and efficiently access the mission-critical cloud infrastructure that serves as the foundation of digital and AI strategies.
Investment Rationale: Combining HPE and Juniper’s complementary portfolios supercharges HPE’s edge-to-cloud strategy with an ability to lead in an AI-native environment based on a foundational cloud-native architecture.
Highlighted Generative AI M&A Transaction
Databricks Acquires MosaicML
Jul 2023
EV
$1.3B
EV/Revenue
NA
Target Description: MosaicML is an AI development platform designed for creating, training, customizing, and deploying large generative AI models.
Investment Rationale: The acquisition bolsters Databricks’ vision to power the next wave of enterprise data applications with generative AI, and together with MosaicML, the Company further establishes itself as the market leading platform for training, customizing, and deploying generative AI applications.
Highlighted Enterprise AI Software M&A Transaction
Microsoft Acquires Nuance Communications
Mar 2022
EV
$19.3B
EV/Revenue
14.4x
Target Description: Nuance Communications is a leader in conversational AI and ambient intelligence across industries including healthcare, financial services, retail and telecommunications.
Investment Rationale: Driven by a shared vision to build outcomes-based AI, Microsoft and Nuance will enable organizations across industries to accelerate their business goals with security-focused, cloud-based solutions infused with powerful, vertically optimized AI.
Source: PitchBook Data, Mergermarket, Company Press Releases, Meridian Research
Artificial Intelligence Sector U.S. M&A Activity
Artificial Intelligence Sector Public Valuation Multiples and Metrics
EV / Revenue FY2024E
EBITDA Margin FY2024E
TTM Revenue Growth
TTM Gross Margin
As of April 1, 2024
Source: PitchBook Data, Mergermarket, Company Press Releases, Meridian Research
Select Artificial Intelligence Sector U.S. M&A Transactions
| Deal Date | Company | Investor(s) | Description | EV ($ in M) | EV/ Revenue |
|---|---|---|---|---|---|
| Mar-24 | One Network Enterprises | Blue Yonder | Provider of an AI powered supply chain management platform | nd | nd |
| Mar-24 | Zapata AI | Andretti Acquisition | Provider of industrial generative AI software solutions | nd | nd |
| Mar-24 | Alteryx | Clearlake Capital Group, Insight Partners | Provider of a data analytics platform with AI capabilities | $6,561 | 6.8x |
| Mar-24 | Data.AI | Sensor Tower (Riverwood Capital) | Provider of AI powered solutions for measuring and analyzing mobile application performance | nd | nd |
| Jan-24 | Juniper Networks | Hewlett Packard Enterprise | Provider of networking products, services, and an AI powered native networking platform | $14,492 | 2.6x |
| Dec-23 | Blaize | BurTech Acquisition | Provider of AI edge computing solutions, hardware, and software | nd | nd |
| Dec-23 | LiveVox | NICE | Provider of a contact-center-as-a-service (or CCaaS) platform with preintegrated AI capabilities | $372 | 2.6x |
| Dec-23 | Imbio | 4DMedical | Provider of AI medical imaging solutions | $25 | 8.3x |
| Dec-23 | Ghost Robotics | LIG Nex1 | Provider of legged robots powered by AI and rapid data analytics intended to be used for military and industrial applications | $240 | 6.9x |
| Nov-23 | GamePlanner | Airbnb | Provider of AI technology, with a focus around design and community | $200 | nd |
| Oct-23 | Ponder | Snowflake | Provider of data science technology designed to maintain scalable, enterprise-ready, and useable machine learning and analytics tools | $46 | nd |
| Oct-23 | RhythmX AI | SAIGroup | Provider of an AI powered precision care platform designed for physicians | $50 | nd |
| Sep-23 | BlueWillow AI | LimeWire | Provider of a generative AI image-creation platform | nd | nd |
| Sep-23 | Roadzen | Vahanna Tech Edge Acquisition I | Provider of a next generation auto insurance platform powered by AI | nd | nd |
| Sep-23 | ArtsAI | Claritas (AJI Capital, Indian Hill Group, The Carlyle Group) | Provider of AI technology designed for the automation of digital marketing | nd | nd |
| Aug-23 | Casetext | Thomson Reuters | Provider of an AI powered legal research platform | $650 | nd |
| Aug-23 | Embark Trucks | Applied Intuition | Provider of self-driving trucks and related software and services | nd | nd |
| Jul-23 | Berkshire Grey | SoftBank Group | Provider of integrated AI and robotic solutions for e-commerce | $345 | 5.2x |
| Jul-23 | MosaicML | Databricks | Provider of software infrastructure and artificial intelligence training algorithms designed to improve the efficiency of neural networks | $1,300 | nd |
| Jun-23 | Apixio | Ardan Equity, New Mountain Capital | Provider of an AI technology platform designed to transform actionable information from healthcare data | $300 | nd |
| May-23 | Sumo Logic | Francisco Partners | Provider of a cloud-based machine data analytics platform | $1,398 | 4.7x |
| May-23 | Accuris | Kohlberg Kravis Roberts | Provider of engineering data and AI powered technology workflow solutions | $975 | 2.0x |
| May-23 | Neosec | Akamai Technologies | Provider of an AI powered API security software platform | 86.7x | nd |
| Apr-23 | iLearningEngines | Arrowroot Acquisition | Provider of an AI and automation platform that productizes institutional knowledge by transforming it into actionable IP | nd | nd |
| Mar-23 | GEO Semiconductor | indie Semiconductor | Provider of video processors used in automotive cameras | $270 | 5.2x |
| Feb-23 | Velodyne Lidar | Ouster | Provider of autonomous technology intended to focus on the safety, efficiency, and sustainability of vehicles | $395 | 8.8x |
| Oct-22 | Zymergen | Ginkgo Bioworks | Provider machine learning, big data, and AI solutions for agricultural and industrial applications | $196 | 13.9x |
| Oct-22 | Frase | Copysmith Artificial Intelligence (Harmony Venture Labs, PSG) | Provider of SEO content optimization and AI writing solutions | nd | nd |
| Jul-22 | Copymatic | Next Net Media (Abacus Finance Group, Clearview Capital, Riverside Credit Solutions) | Provider of an AI-powered content writing platform | nd | nd |
| Apr-22 | SoundHound AI | Archimedes Tech SPAC Partners | Provider of voice AI and speech recognition solutions | nd | nd |
| Mar-22 | Streamlit | Snowflake | Provider of an open-source application framework designed to help data scientists and machine learning engineers build and deploy data apps | $651 | nd |
| Mar-22 | Linode | Akamai Technologies | Provider of cloud hosting services enabling clients to build, deploy, and scale applications easily and cost-effectively in the cloud | $899 | 9.0x |
| Mar-22 | Nuance Communications | Microsoft | Provider of imaging and speech technologies powered by AI | $19,284 | 14.4x |
| Feb-22 | BA Insight | Upland Software | Provider of an AI-driven technology designed to power intranets and cognitive search services | $34 | nd |
| Feb-22 | MonkeyLearn | Medallia (Thoma Bravo) | Provider of an AI powered no-code text analysis platform | nd | nd |
| Feb-22 | Quanergy Systems | CITIC Capital Acquisition | Provider of a high-performance AI powered LiDAR platform | nd | nd |
| Feb-22 | Safekeep | CCC Intelligent Solutions | Provider of AI-guided engagement and workflow tools | $33 | nd |
| Feb-22 | Trifacta | Alteryx | Provider of a data engineering cloud platform | $400 | nd |
| Jan-22 | Enview | Matterport | Provider of a scalable AI platform intended to enable rapid, automated classification of 3D point clouds | $71 | nd |
| Mean | $1,266 | 7.8x | |||
| Medium | $285 | 7.6x |
As of April 1, 2024
Source: PitchBook Data, Mergermarket, Company Press Releases, Meridian Research
Artificial Intelligence Sector Public Valuations
Cloud & Diversified AI
| Company Name | Ticker | Share Price | EV | YoY Revenue Growth | EBITDA Margin | FY 2024E Revenue | FY 2024E EBITDA | EV / FY 2024E Rev | EV / FY2024E EBITDA |
|---|---|---|---|---|---|---|---|---|---|
| Microsoft | MSFT | $421 | $3,148,067 | 12% | 56% | $211,548 | $103,381 | 14.9x | NM |
| Alphabet | GOOGL | $151 | $1,837,719 | 9% | 38% | $306,237 | $122,556 | 6.0x | 15.0x |
| Amazon.com | AMZN | $180 | $1,941,378 | 12% | 19% | $570,873 | $105,893 | 3.4x | 18.3x |
| Meta Platforms | META | $486 | $1,248,421 | 16% | 55% | $133,679 | $72,950 | 9.3x | 17.1x |
| Oracle | ORCL | $126 | $431,448 | 9% | 48% | $49,856 | $24,024 | 8.7x | 18.0x |
| Adobe | ADBE | $505 | $228,373 | 11% | 49% | $19,377 | $9,595 | 11.8x | 23.8x |
| SAP | SAP | $195 | $227,274 | 6% | 29% | $33,823 | $9,680 | 6.7x | 23.5x |
| International Business Machines | IBM | $191 | $222,573 | 2% | 25% | $61,778 | $14,646 | 3.6x | 15.2x |
| Altair Engineering | ALTR | $86 | $6,815 | 7% | 21% | $614 | $124 | 11.1x | NM |
| Mean | $260 | $1,032,452 | 9% | 38% | $154,198 | $51,428 | 8.4x | 18.7x | |
| Median | $191 | $431,448 | 9% | 38% | $61,778 | $24,024 | 8.7x | 18.0x |
AI Software & Infrastructure
| Company Name | Ticker | Share Price | EV | YoY Revenue Growth | EBITDA Margin | FY 2024E Revenue | FY 2024E EBITDA | EV / FY 2024E Rev | EV / FY2024E EBITDA |
|---|---|---|---|---|---|---|---|---|---|
| CrowdStrike | CRWD | $321 | $75,425 | 36% | 25% | $3,050 | $756 | 24.7x | NM |
| Snowflake | SNOW | $162 | $49,447 | 36% | 6% | $2,794 | $289 | 17.7x | NM |
| Palantir Technologies | PLTR | $23 | $49,431 | 17% | 30% | $2,219 | $642 | 22.3x | NM |
| Datadog | DDOG | $124 | $41,616 | 27% | 23% | $2,108 | $496 | 19.7x | NM |
| MongoDB | MDB | $359 | $24,721 | 31% | 15% | $1,663 | $255 | 14.9x | NM |
| NICE | NICE | $260 | $16,620 | 9% | 32% | $2,402 | $817 | 6.9x | 20.3x |
| Dynatrace | DT | $46 | $13,097 | 24% | 27% | $1,425 | $406 | 9.2x | NM |
| UiPath | PATH | $23 | $10,970 | 24% | 20% | $1,287 | $217 | 8.5x | NM |
| OpenText | OTEX | $39 | $18,342 | 61% | 33% | $4,518 | $1,499 | 4.1x | 12.2x |
| Elastic | ESTC | $100 | $9,765 | 18% | 13% | $1,067 | $58 | 9.2x | NM |
| Informatica | INFA | $35 | $10,995 | 6% | 30% | $1,582 | $457 | 6.9x | 24.0x |
| Confluent | CFLT | $31 | $8,391 | 33% | (1%) | $769 | ($59) | 10.9x | NM |
| SentinelOne | S | $23 | $5,972 | 47% | (19%) | $617 | ($106) | 9.7x | NM |
| Pegasystems | PEGA | $65 | $5,647 | 9% | 20% | $1,372 | $213 | 4.1x | 26.5x |
| Teradata | TDC | $39 | $4,114 | 2% | 21% | $1,832 | $438 | 2.2x | 9.4x |
| Darktrace | DARK | $6 | $3,299 | 27% | 29% | $545 | $120 | 6.1x | 27.5x |
| C3.ai | AI | $27 | $2,444 | 11% | (30%) | $266 | ($66) | 9.2x | NM |
| Appian | APPN | $40 | $3,039 | 17% | (8%) | $541 | ($59) | 5.6x | NM |
| Veritone | VERI | $5 | $259 | (15%) | (31%) | $127 | $3 | 2.0x | NM |
| Mean | $91 | $18,610 | 22% | 12% | $1,589 | $336 | 10.2x | 20.0x | |
| Median | $39 | $10,970 | 24% | 20% | $1,425 | $255 | 9.2x | 22.2x |
Semiconductor
| Company Name | Ticker | Share Price | EV | YoY Revenue Growth | EBITDA Margin | FY 2024E Revenue | FY 2024E EBITDA | EV / FY 2024E Rev | EV / FY2024E EBITDA |
|---|---|---|---|---|---|---|---|---|---|
| Nvidia | NVDA | $904 | $2,238,551 | 126% | 62% | $59,307 | $35,351 | 37.7x | NM |
| Taiwan Semiconductor | TAI: 2330 | $24 | $609,025 | 4% | 68% | $68,191 | $45,897 | 8.9x | 13.3x |
| Broadcom | AVGO | $1,325 | $642,578 | 13% | 64% | $35,814 | $22,937 | 17.9x | 28.0x |
| ASML Holding | ASML | $965 | $377,537 | 30% | 36% | $29,207 | $10,243 | 12.9x | NM |
| Advanced Micro Devices | AMD | $180 | $290,526 | (4%) | 24% | $22,669 | $6,574 | 12.8x | NM |
| Qualcomm | QCOM | $169 | $193,889 | (16%) | 35% | $35,694 | $12,455 | 5.4x | 15.6x |
| Intel | INTC | $44 | $210,288 | (14%) | 24% | $53,986 | $13,000 | 3.9x | 16.2x |
| ARM | ARM | $125 | $127,394 | NA | 37% | $3,177 | $1,390 | 40.1x | NM |
| Micron Technology | MU | $118 | $134,811 | (21%) | 26% | $15,479 | $2,834 | 8.7x | NM |
| Synopsys | SNPS | $572 | $88,127 | 19% | 37% | $5,827 | $2,181 | 15.1x | NM |
| Marvell International | MRVL | $71 | $64,499 | (7%) | 31% | $5,502 | $1,565 | 11.7x | NM |
| indie Semiconductor | INDI | $7 | $1,051 | 101% | (20%) | $226 | ($20) | 4.7x | NM |
| Mean | $375 | $414,856 | 21% | 35% | $27,923 | $12,867 | 15.0x | 18.3x | |
| Median | $147 | $202,088 | 4% | 35% | $25,938 | $8,409 | 12.3x | 15.9x |
Mobility & Autonomous Cars
| Company Name | Ticker | Share Price | EV | YoY Revenue Growth | EBITDA Margin | FY 2024E Revenue | FY 2024E EBITDA | EV / FY 2024E Rev | EV / FY2024E EBITDA |
|---|---|---|---|---|---|---|---|---|---|
| Mobileye | MBLY | $32 | $24,669 | 11% | 38% | $2,080 | $724 | 11.9x | NM |
| Aurora | AUR | $3 | $2,664 | NA | NA | $0 | ($673) | NM | NM |
| Luminar | LAZR | $2 | $1,138 | 71% | (411%) | $75 | ($286) | 15.2x | NM |
| Cerence | CRNC | $16 | $853 | 10% | 26% | $288 | $37 | 3.0x | 23.0x |
| Smart Eye | SEYE | $8 | $259 | 28% | (61%) | $29 | ($11) | 9.0x | NM |
| Innoviz Technologies | INVZ | $1 | $86 | 246% | (491%) | $17 | ($106) | 5.0x | NM |
| Mean | $10 | $4,945 | 73% | -180% | $415 | ($52) | 8.8x | 23.0x | |
| Median | $5 | $995 | 28% | -61% | $52 | ($58) | 9.0x | 23.0x |
As of April 1, 2024
Source: PitchBook Data, Mergermarket, Company Press Releases, Meridian Research
Meridian Capital's Technology Transaction Experience
*Note: Includes transactions completed by Meridian bankers while at previous firms
