Does artificial intelligence boost the valuation of tech companies?
Not necessarily. Artificial intelligence is not driving up the value of all tech companies. It is creating a clear divide in the valuation of tech companies, separating strategic firms from those that are starting to become dispensable.
At Baker Tilly’s Tech M&A division—the leading advisor on technology mergers and acquisitions in the Iberian mid-market by number of transactions in the TMT sector in 2025—we have observed a clear trend: AI does not add value on its own; rather, it reshapes where value lies.
Does having AI increase a company’s value?
No. One of the most common mistakes in the process of buying and selling technology companies is to assume that incorporating AI into the product automatically increases the valuation multiple.
That is no longer true.
Today’s buyers (funds, corporates, private equity firms) are more technically savvy and demand clear evidence. The question is no longer whether you use AI, but whether that AI has an impact on:
- Reduction in customer churn
- Improved margin
- Increase in LTV
- Operational efficiency
When valuing technology companies, KPIs are more important than the narrative.
What do buyers look for in today’s tech M&A market?
Buyers are prioritising four key factors in their assessment:
- First-party data not dashboards, but datasets that are difficult to replicate and which improve the product)
- Involvement in a critical workflow (the more critical your role is in the customer’s process, the greater your value)
- Real impact on the business (AI must deliver tangible results, not just demos)
- Defensibility (avoiding the automation of tasks and resisting ‘commoditisation’)
Multiples in 2025: the fork test
Our research and the sources analysed reveal a clear division in the market:
- “AI core” companies: ~33x EV/Revenue
- Medium-sized SaaS: ~5,3x – 5,4x
- Lower quartile: ~2,5x – 2,8x
- Average SaaS multiple: has fallen from 24x in 2024 to 18x in 2025)
The market isn’t paying to ‘use AI’. It pays to control an advantage that grows stronger with use.
What is the most significant change in M&A?
In the current climate, buyers no longer simply purchase products.
They buy:
- Speed
- Talent
- Data
- Know-how
The sources analysed sum it up well: 2025 was the busiest year on record for SaaS M&A, with 746 transactions in the third quarter alone – 26% more than the previous year. And much of this activity is no longer driven solely by the traditional buy market shareapproach, but by a buy over buildstrategy; in other words, the buyer acquires what enables them to move forward more quickly.
If AI can build software, does that mean my company is losing value?
That doesn’t necessarily have to be the case. A new key factor has emerged in the valuation of technology companies: buyers want to know whether your position will remain strong as AI continues to drive down the cost of building, operating and replacing software.
When buyers don’t see your product as durable, they will do one of two things:
- Lower the multiple, or
- Tighten up the terms of the deal (earn-outs, retention clauses, conditions).
In fact, 80% of buyers see AI-driven commoditisation as the main threat to SaaS, and that perception carries a lot of weight in negotiations.
Is due diligence really important for valuation?
Yes, it is critical. Although it wasn’t as significant in the past, it is now the main factor determining the price. The most sensitive areas tend to be:
- Intellectual property and contracts
- Use of open source software
- Data quality
- Technical units
- Consistency of metrics
Any weakness identified results in a reduction in the load-bearing capacity or increased structural requirements.
What can you do to protect the value of your business?
Before starting the sales process, it is essential to answer three questions:
Does AI improve a real KPI?
It is not enough simply to integrate AI. It must have an impact on measurable results.
Do you tell the story from the perspective of the outcome or the technology?
Buyers value the impact on their business, not the technology.
Talking about technology doesn’t sell. Presenting yourself as a company that reduces costs or eliminates risks where the customer can’t go wrong says a lot more. Buyers buy impact, not slogans.
Is your company ready for due diligence??
Prepare the IP, technical debt, metrics, contracts, technology… Anything that isn’t resolved before the process begins will be seen as a risk during negotiations.
How long should you wait before selling a business?
Less than two years. The truth is that sales are no longer measured in years, but in quarters. A telling statistic that confirms this trend is that 40% of SaaS CEOs are considering bringing forward their exit plans due to the uncertainty caused by the rapid evolution of AI.
In many cases, waiting without a clear strategy can lead to a fall in the valuation.
Can AI influence a company’s valuation?
Yes, but not automatically. AI is already a factor in valuation, although many companies have yet to incorporate it properly into their narrative.
The key is not to position yourself as a company ‘with AI’, but to demonstrate something much more concrete:
- Without your company, it would take the buyer longer
- That would involve taking on more risk
- Or that would generate less value
That is what really affects the multiple.
If you are considering selling your business within the next 12–24 months, we can help you understand how the market views your company today.
You can take a self-assessment test to gauge how well prepared your company is.
