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Stephanie Zeppa

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Stephanie Zeppa is a partner in the Corporate & Securities Group in the firm's San Francisco office.

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Is your M&A target a company that develops or uses artificial intelligence (“AI”) tools? AI, and generative AI technologies specifically, are powerful business tools but present novel legal issues in the context of M&A transactions. It is increasingly important to identify and understand the unique legal risks associated with the use of AI technologies, tailor your diligence to investigate them and include AI-specific reps and warranties in your deal documents. To effectively do this, it is important to have someone well-versed in AI technology and the associated legal issues on the deal team. Many subtle issues, if not properly understood and addressed, can lead to liability and/or loss of business value. The attached article addresses the expansion of due diligence, beyond standard tech diligence, to include the analysis of AI tools developed or used by the target. It covers some of the key AI-specific legal issues to consider in M&A, but the issues in each transaction will be unique depending on the target company’s involvement with AI. Once you understand the target company’s involvement with AI, it is important to consider the unique legal issues and the diligence needed beyond the standard diligence questions.Continue Reading M&A Transactions: Diligencing AI Issues with Target Companies

Is your M&A target a manufacturing company with automated production, a consumer products business with online sales and marketing or an education company that creates content for students? The increasing use and development of artificial intelligence (“AI”) systems and products, particularly generative AI, has created risks for businesses using such tools. AI plays a role in many industries and businesses whose products and services are not themselves AI. In the context of a M&A transaction, it is important to identify and allocate responsibility for these risks. Risks of AI may include: infringement (including through use of training data as well as outputs), confidentiality, IP ownership and protection (including limits on protection of IP generated by AI), regulatory (e.g., privacy, recent AI related legislation), and other risks arising from use such as indemnity obligations or managing contractor use of AI.Continue Reading M&A Transactions: Drafting AI Representations and Warranties for Non-AI Companies