AI Spending Puts a New Question in Deal Talks: Expense or Investment?

Artificial intelligence is giving some baby boomer business owners one more reason to sell: They don’t want to deal with it.

But walking away is not so simple.

For owners heading to market, AI is becoming more than a tech headache. It is becoming a test of the company’s books—and potentially its price tag.

Buyers and private equity firms want to know whether privately held companies have invested in AI, automation and other tools that can boost profits. But they also want answers to tougher questions: How were those costs recorded? Do they support the company’s earnings story? And was management making a smart bet—or just throwing money at the hottest trend in business?

“There are many boomers who are kind of just throwing their hands up,” said Joshua Chananie, a partner, board member and consumer products leader at SAX Advisors, an independent accounting and advisory firm.

To dig deeper, visit the original article on the Thomson Reuters blog.