Technology, Data & AI Due Diligence

A company’s technological substance is a central valuation factor in the M&A process and at the same time one of the most underestimated. Data quality, AI capabilities, cloud architecture and cybersecurity posture determine whether an investment case rests on a robust technological foundation or whether hidden risks and investment requirements will burden the business case after closing.

Context and relevance

For a growing number of business models, data and AI have become a structural competitive factor – not as an add-on, but as a core component of the value-creation logic. At the same time, regulatory requirements are increasing: the EU AI Act sets new standards for the use of AI-based systems and raises the compliance pressure on companies that deploy AI in products or processes. Missing governance, unclear chains of rights or fragile data pipelines can substantially impair an investment case. For PE investors, a risk-focused, fact-based assessment of a target’s technological, data-related and security-relevant dimensions is therefore not an add-on to conventional due diligence but an integral part of a robust investment decision.

Our approach

FOSTEC & Company structures the technology, data & AI due diligence along three core disciplines: data & AI due diligence, IT & technology due diligence and cybersecurity due diligence (Figure 1: Core aspects of the technology, data & AI due diligence). The approach combines technological depth with a clear translation into implications for the business plan, valuation and post-deal agenda.