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When the telecom giant Cisco agreed to fork over $28 billion for a small data-analytics company called Splunk in September, it was a ray of light in an otherwise gloomy M&A, or mergers-and-acquisitions, market.

M&A declined in 2023 for the second year in a row as the economy grappled with a higher cost of borrowing and changing consumer behavior. But Cisco's deal to buy Splunk was among the largest acquisitions of 2023 and the largest acquisition in the AI space in at least three years. It helped push the number of AI deals into record territory, S&P Global Market Intelligence said.

With ChatGPT and Sam Altman becoming household names, some on Wall Street are now betting that the Cisco-Splunk deal is just the tip of the iceberg. They see corporate America's obsession with artificial intelligence kicking off a new era of mergers, acquisitions, and IPOs for years to come.

Neil Kell, the head of one of Bank of America's tech-banking groups, explained it this way: AI has been "an exciting, intellectual exercise over the last couple of years." But given how much AI has matured in recent years, the industry is "transitioning into a phase of action," he said.

Wall Street's AI predictions are so big that some banks, including Citi, have created new roles to accommodate the sector. In September, three Qatalyst alumni launched Axom Partners, an M&A-advisory firm focused specifically on AI-related dealmaking.

Some bankers predict that generative AI when the machines are trained to produce original content may soon become one of Wall Street's biggest revenue drivers because it touches so many different industries, from healthcare to manufacturing and advertising.

As of the end of November 2023, machine-learning deals drove some $69 billion in M&A, accounting for a record 27% of tech deals by value, according to S&P Global Market Intelligence. The financial-research firm counted deals that sit squarely in the AI sector, such as the Cisco-Splunk deal, and deals involving targets with AI capabilities, such as IBM's $4.6 billion acquisition of the business-management-software maker Apptio.

"There are very few spaces we can point to in tech where deal flow isn't being driven, in some capacity, by the need to incorporate AI or facilitate it," Melissa Incera, an M&A analyst with S&P Global Market Intelligence, said.

Of course, several things will need to fall into place for Wall Street to benefit from the AI-driven "super cycle" many bankers predict. AI companies, many of which are only now being formed, need to mature, and the winners and losers need to come into focus. Many buyers also need to figure out how to monetize AI. But some bankers believe AI will check these boxes quicker than in previous tech-driven deal cycles.

Given AI's potential to change our economy, Business Insider set out to find the bankers best positioned to lead the pack when the AI-deals boom is unleashed.

Our list focuses on bankers with deep experience in tech and AI, from M&A advisors to equity-capital fundraisers to chairs of massive tech teams and founders of banks.

We also did our best to capture their predictions of the upcoming AI revolution. Some bankers see AI as the next "iPhone moment" and say it could result in a dealmaking surge as soon as next year. Others see a longer runway. But everyone agrees it presents one of the most pressing threats and opportunities for businesses today.

"Even now, there isn't a deal anyone is working on where 'what is your gen AI strategy?' isn't the No. 1, two, and three questions. It's the fastest-moving technology we've ever seen, and that's going to continue to be the case," Rob Chisholm, an analyst at Qatalyst Partners, said.

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The AI Shopping Spree Is Taking Off. Meet 11 Bankers Poised to Come Out on Top. - Business Insider