- A company's data can now be valued separately because AI buyers license it, which can change acquisition economics.
- Several state privacy laws exclude transfers of personal data in a merger or acquisition from the definition of a sale, but a later license to an AI company is a separate transaction.
- Acquirers should diligence any past AI data licenses: who has copies, on what terms, and with what exclusivity.
- Sellers can license non-core data before closing, or carve data rights out of the deal.
Data as a separate asset
AI developers pay for archives that show real work: support conversations, code history, internal discussion and expert decisions. That gives some companies a data asset worth negotiating over separately from the operating business. See how to value a dataset and the published figures on AI data prices.
The privacy distinction that matters
Virginia's privacy law excludes from a sale the transfer of personal data to a third party as an asset in a merger, acquisition or bankruptcy in which the third party takes control of the business's assets (Code of Virginia). Other state laws have similar carve-outs. That covers the acquirer receiving the data. It does not cover the acquirer then licensing that data to an AI company, which is a new use subject to the original privacy notices.
For acquirers: diligence questions
- Has the target licensed data to any AI company or data vendor? Get the agreements.
- Are any licenses exclusive, and do they restrict your plans?
- Who holds copies, and what deletion rights exist on termination?
- Did the privacy notices in force when data was collected permit licensing?
- Did the target train its own models on customer data, and under what terms?
For sellers: options before closing
- License before signing. Turn data into revenue that supports the valuation, if it does not conflict with the buyer's plans.
- Carve out data rights. Keep the right to license specific historical data, or share proceeds with the acquirer.
- Disclose and price it. Present the data asset in the data room with a manifest so the buyer pays for it.
Representations and warranties
Expect representations that data was collected lawfully, that privacy notices permitted current uses, and that no AI license has been granted except as disclosed. If you have licensed data, schedule each license.
Read exclusive vs non-exclusive licenses.
Read next
Questions
Is transferring data in an acquisition a sale of personal data?
Several state laws, including Virginia's, exclude transfers of personal data as an asset in a merger or acquisition. Licensing that data to an AI company afterwards is a separate transaction.
Can we license data while selling the company?
Yes, if it does not conflict with the acquisition terms. Disclose any license to the buyer and consider whether exclusivity affects their plans.