Global M&A activity in AI

M&A activity in AI remains robust, driven by a consistent priority among buyers to acquire technologies that enhance their service offerings and establish a competitive edge. Year after year, service and experience enhancement (76%) and differentiation (71%) remain the key motivators for AI acquisitions. According to this report, the greatest overall interest is in predictive analytics (64%), natural language processing (NLP) (44%), and machine learning (33%), highlighting these as the most sought-after technologies driving strategic AI investments.

The adoption of artificial intelligence (AI) in Latin America is accelerating at an unprecedented pace. With a projected compound annual growth rate (CAGR) of 26.7% between 2025 and 2030, the region is experiencing a transformative wave in the AI landscape. Companies, investors, and policymakers are increasingly recognizing AI’s potential to reshape industries, improve efficiency, and drive economic growth.

AI adoption in Latin America has surged by 67% in the past two years, surpassing the global average of 59% (IBM, 2024). Generative AI, in particular, is gaining traction, with 37% of companies actively implementing AI-driven solutions and 45% in the exploratory phase. These figures underscore the significant momentum behind AI and its potential to become a key driver of technological advancement in the region.

Investment in AI startups on the rise

While Latin America still trails behind global markets like the U.S., Europe, and China in AI investment, the trend is shifting. Private equity (PE) and venture capital (VC) investments in AI and machine learning (ML) peaked at $208M in 2022. Despite a decline in 2023, investor interest remains strong, with $141M invested in the first three quarters of 2024 (LAVCA – Latitud, Tech Report 2024). This resurgence signals growing confidence in the region’s AI ecosystem and its long-term potential for innovation and disruption.

Latam leaders in AI development

Several Latin American countries have emerged as AI leaders, demonstrating advancements across key dimensions such as technological infrastructure, talent development, research, and governance. According to the Latin American Artificial Intelligence Index (ILIA, 2024), Latin American countries are categorized into three groups based on their AI development: Pioneers, Adopters, and Explorers. While Chile, Uruguay, and Brazil lead as pioneers, countries such as Mexico, Argentina, and Colombia are classified as adopters, demonstrating solid advancements in AI research and implementation but still requiring improvements in infrastructure and policy frameworks. The explorer countries, including Ecuador, Peru, and the Dominican Republic, are in the early stages of AI integration and must address foundational gaps to accelerate AI adoption.

ILIA 2024 also highlights the importance of governance and strategic alignment in fostering AI growth. Countries with well-defined national AI strategies and regulatory frameworks tend to exhibit stronger AI ecosystems, reinforcing the necessity for regional collaboration and investment in enabling technologies. Strengthening AI governance will be critical for ensuring ethical AI deployment and maximizing the technology’s economic impact across Latin America. With increasing investments, government initiatives, and a growing talent pool, the region is poised to become a significant player in the global AI economy.

Opportunities for M&A in the AI sector

For both the buy-side and sell-side in M&A transactions, the AI sector presents promising opportunities. As Latin American startups mature and AI capabilities evolve, strategic acquisitions and investments can help companies gain a competitive edge. Investors looking to capitalize on the AI boom should consider:

• Scaling AI-driven companies: Companies with established AI solutions in fintech, healthcare, and logistics offer attractive acquisition targets.
• Cross-border synergies: Partnerships with global tech firms can accelerate AI adoption and drive technological integration.
• Government support: Countries leading AI adoption are also fostering regulatory frameworks that encourage investment and innovation.

The future of AI in Latin America

As AI adoption continues to expand, Latin America stands at the forefront of a technological revolution. With increasing investments, government initiatives, and a growing talent pool, the region is poised to become a significant player in the global AI economy. By 2030, AI-driven automation could contribute up to 5% of Latin America’s GDP, enhancing productivity and economic growth (World Economic Forum, 2024). However, challenges remain, including the need for stronger AI infrastructure, regulatory alignment, and the development of specialized talent to sustain long-term growth. Addressing these factors will be crucial for Latin America to fully harness AI’s transformative potential and compete on a global scale.

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