Recently, artificial intelligence has become one of the main topics of debate in the corporate sphere. Its role, use, and impact on processes such as investment, company valuation, and M&A transactions are under constant analysis.
For the first time, small and medium-sized enterprises (SMEs) have access to the same technological advances as large international corporations. Some analysts even argue that they are in an advantageous position to adopt these technologies, thanks to more agile structures that make it easier to adapt and redefine their business model.
However, the ability to take advantage of this opportunity is not automatic. Success will depend on the extent to which companies are able to transform themselves and effectively integrate AI into their processes and operations, generating tangible results. This execution capability will be key to distinguishing companies with sustainable competitive advantages from those that are more exposed to disruption.
From an external perspective, it may seem that the market mainly rewards the narrative associated with AI. However, investors tend to rigorously assess the real value this technology brings to each company: Does it actually improve the product or service? Does it increase recurring revenue? Does it enable cost reduction or price increases? Does it act as a clear source of competitive differentiation? When the answer is yes, the company’s valuation is likely to be positively affected.
That said, AI has also proven to be a double-edged sword. In certain segments of software development, it is driving a significant reduction in production costs. Fewer resources and less time are increasingly required to develop solutions, while specialization continues to grow. This dynamic may cause certain products, especially those that are less critical or easily replicable, to see their competitive advantage eroded. In other words, when the cost of substitution decreases, perceived value also tends to decline.
For this reason, the market is no longer focused solely on historical growth or the technological narrative. Increasingly, greater importance is being placed on the durability of growth, the real ability to monetize AI, and the risk that this same technology lowers barriers to entry in the sector.
Where can AI have the greatest impact?
1. Critical B2B software or software embedded in processes
This is one of the segments best positioned to capture value. When software is integrated into the client’s operations and AI improves productivity, automation, or decision-making, the company can strengthen retention, pricing power, and commercial expansion. Here, AI usually acts as an additional lever on a product that was already valuable.
2. Horizontal or less critical software
This is where many investors show greater caution. If the product solves a useful but non-essential need, and its features can also be replicated more quickly and more cheaply thanks to AI, the risk increases. Not because the business no longer makes sense, but because it may lose differentiation and pricing power.
3. Technology consulting firms
AI can be a very attractive opportunity, but not automatically. The firms best positioned tend to be those that turn knowledge into reusable solutions, accelerators, methodologies, or sector specialization. By contrast, models that rely heavily on selling undifferentiated hours may face greater pressure if buyers anticipate that part of the work will become automatable.
4. Data, cloud, cybersecurity, and data governance
Many companies will not capture value by “doing AI,” but by enabling AI to work. Data quality, integration, security, regulatory compliance, and infrastructure are becoming increasingly relevant. These types of assets tend to become more attractive because they address more structural and less tactical needs.
5. Vertical software and companies with proprietary data
This is probably one of the most attractive categories for the middle market in Europe and Spain. When a company operates in a specific niche and combines software, sector knowledge, and proprietary data, AI can reinforce a position that is difficult to replicate. Here, not only the technology matters, but also the context, track record, and depth of the use case.
What are investors really rewarding?
More than the mere presence of AI, what is being valued is:
- the existence of a sustainable competitive advantage,
- the real and measurable impact on revenue and/or margins,
- the difficulty of replacing the product or service,
- and the ability to demonstrate that AI strengthens the business model rather than weakens it.
In the European and Spanish context, these criteria are especially relevant. Valuations tend to depend less on narratives and more on commercial visibility, revenue quality, dependence on the management team, and the strength of the competitive positioning:
| Category | Impact on valuation | What the investor looks at |
|---|---|---|
| Critical B2B software | Positive | Retention, pricing, integration, and switching barriers |
| Horizontal software | Mixed or cautious | Substitution risk, price pressure, lower differentiation |
| Technology consulting firms | Selectively positive | Specialization, proprietary IP, reusable solutions |
| Data / cloud / cyber / governance | Positive | Enabling role, recurring revenue, structural relevance |
| Vertical software with proprietary data | Very positive | Hard-to-replicate advantage, sector depth, real monetization |
AI does not make all technology companies worth more. What it does is make it much more visible which companies have a solid position and which may become more replaceable. In valuation terms, that distinction is fundamental.
If you are considering any type of corporate transaction, you can contact us at admin@tegancorporate.com.
