AI-Driven M&A: How UK CEOs Are Accelerating Transformation

UK CEOs are using M&A as the fastest route to AI capability, not just scale. According to EY’s 2026 CEO Outlook, 87% of UK CEOs expect their organisation’s appetite for M&A to increase over the next 12 months, with acquisitions increasingly targeted at AI talent, data assets and proprietary models rather than market share alone.

Building AI capability organically takes years most boards will not wait for. Buying it, through acquisition or strategic alliance, compresses that timeline — but only if the CEO has a disciplined framework for what to acquire and how to integrate it. Confidence is high despite the uncertainty: 87% of UK CEOs say they remain confident about the year ahead.

Why Are UK CEOs Turning to M&A to Accelerate AI Transformation?

EY’s research finds 69% of UK CEOs are actively pursuing M&A over the next 12 months, with a further 63% exploring strategic alliances and 42% considering joint ventures. Separately, 74% plan to increase AI investment in 2026 compared with 2025. The overlap between those two figures is the story: dealmaking has become a primary lever for AI acceleration, not a parallel workstream.

Rather than pursuing scale for its own sake, UK CEOs are prioritising targeted, value-led acquisitions — smaller deals that bring a specific model, dataset or engineering team, rather than large consolidating mergers.

Executive Action:

• Define which AI capability gaps M&A should close before screening any target
• Rank build, partner and buy options against speed-to-value, not just cost
• Set a maximum deal size threshold that still permits fast board approval

What Due Diligence Questions Does AI-Driven M&A Require?

Traditional financial and legal due diligence is necessary but insufficient when the asset being bought is a model, a dataset or an engineering team. CEOs need answers on data provenance and licensing, model ownership versus third-party dependency, key-person retention risk for the AI talent being acquired, and whether the target’s AI systems would themselves need remediation under UK GDPR, the ICO’s AI guidance or the EU AI Act’s extraterritorial provisions.

Skipping this layer of diligence is how acquirers end up owning undisclosed compliance liabilities alongside the capability they actually wanted.

Executive Action:

• Add a dedicated AI and data diligence workstream to every deal team, not a bolt-on to IT diligence
• Verify training data licensing and provenance before signing
• Use INFORMD’s capital approval assessment template to structure the investment case

How Should CEOs Sequence Transformation After the Deal Closes?

57% of UK CEOs report they are currently undergoing a significant enterprise-wide transformation initiative, with a further 41% planning to start one within 12 months. Layering an acquisition integration on top of an existing transformation programme, without resequencing, is a common cause of both initiatives stalling.

The CEOs getting the most value from AI-driven M&A treat integration as the primary deliverable, with a named integration lead reporting directly to them, rather than delegating it entirely to a post-merger integration function disconnected from the wider transformation agenda.

Executive Action:

• Appoint a single integration lead with direct CEO reporting for any AI-capability acquisition
• Resequence existing transformation milestones explicitly around the new acquisition, rather than running both in parallel unchanged
• Set a 100-day plan with named AI capability milestones, not just cost-synergy targets

What Talent and Culture Risks Do AI-Driven Deals Create?

The core asset in most AI acquisitions walks out the door if retention fails. Specialist AI engineers and researchers have more external options than most corporate talent, and a mishandled integration — unclear reporting lines, mismatched compensation, or a slow decision-making culture replacing a fast one — can erode the acquired capability within months.

78% of UK CEOs report they have already altered investment strategies in response to geopolitical and trade policy shifts, underscoring that the environment for these deals remains volatile even as appetite grows. Retention planning needs to be resilient to that volatility, not built only for a stable base case.

Executive Action:

• Build retention packages and vesting schedules before deal close, not after
• Preserve the acquired team’s decision-making autonomy for an agreed transition period
• Brief the board on key-person dependency risk as a standing item until retention milestones are met

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