Seventy-four artificial intelligence (AI) companies in the technology sector were the subject of M&As in the second quarter of 2019, according to GlobalData’s analysis.
This was a 22.9% dip from the previous quarter (Q1 2019), which reported 96 M&As involving AI companies. The total disclosed deal value recorded by the AI companies (that were the target of acquisitions) was $17.7bn in Q2 2019, a 65.4% increase from $10.7bn recorded in Q2 2018.
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Artificial intelligence refers to software-based systems that use data inputs to make decisions on their own or that help users make decisions. GlobalData predicts that within five years, the deployment of AI will be essential to the survival of a wide range of companies across all sectors.
GlobalData defines an AI company as those that offer AI-driven solutions, either partly or wholly, to help organisations scale, perform and adapt better to changing business environments. In this M&A round-up, GlobalData captures mergers and acquisitions involving tech and telecom companies to leverage AI technologies.
The graph below depicts the AI deal volume during the second quarters (Q2), between 2017 and 2019.
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By GlobalDataThe top five deals:
Salesforce pays $15.7bn to buy data analytics firm Tableau
Cloud-based software company Salesforce signed a definitive agreement in June 2019 to purchase data analytics company Tableau in an all-stock transaction worth $15.7bn. The deal came just days after Google announced the acquisition of analytics startup Looker for $2.6bn. The Tableau deal is expected to be completed during Salesforce’s third quarter ending 31 October 2019, subject to customary closing conditions.
HPE signs $1.3bn deal to acquire supercomputer maker Cray
IT solutions provider Hewlett Packard Enterprise (HPE) signed an agreement in May 2019 to acquire supercomputer maker Cray for nearly $1.3bn in cash. Cray is currently developing the world’s fastest supercomputers for two laboratories of the US Department of Energy – the Argonne National Laboratory and Oak Ridge National Laboratory. The deal is expected to close by the first quarter of HPE’s fiscal year 2020, subject to regulatory approvals and other customary closing conditions. Cray, which has 1,300 employees worldwide, posted annual revenue of $456m in 2018, which is 16% more than the revenue generated in 2017.
Reliance Jio acquires 87% stake in AI chatbot firm Haptik
Indian mobile network operator Reliance Jio, a wholly-owned entity of Reliance Industries, acquired 87% stake in Mumbai-based chatbot company Haptik Infotech for $101.2m in April 2019. Chatbots are becoming the go-to-support for all customer-related queries. Using natural language processing powered by AI, the chatbot technology mimics human conversations. The telecom company will compete directly with Amazon Alexa and Google Assistant in the Indian market.
Huawei acquires Russian facial technology firm Vocord
Chinese telecom company Huawei acquired Russian security systems provider Vocord for $50m in June 2019. Vocord offers technologies including facial recognition, video surveillance and analysis, video enhancement and authentication, license plate recognition, and audio recording. All of Vocord’s employees, as well as its technologies, have been transferred to Igl Softlab, a new entity set up by Huawei’s Russian subsidiary and Huawei Digital Technologies.
NetApp snaps up Israeli data security developer Cognigo
In May 2019, NetApp, a data storage company, acquired Israel-based data security and GDPR compliance software developer D.Day Labs, which does business as Cognigo, for $70m. Following the acquisition, Cognigo’s 35 employees joined NetApp’s Israel development centre. Cognigo’s data protection platform leverages natural language processing and other AI-based technologies to classify data to meet regulatory demands. It also supports data stored in the cloud and on-premises.
