How investors price AI governance into company valuations. 12 to 18 per cent discount.
In the summer of 2025, a Dutch technology company missed out on a strategic acquisition. The buyer — a Scandinavian private equity fund — withdrew after due diligence. The reason: no demonstrable AI governance, an unclear compliance position under the EU AI Act, and an AI portfolio consisting of eleven uncoordinated pilots without measurable returns.
The company was profitable, technologically relevant and well-managed by traditional metrics. But on the AI governance dimension — now a standard component of every serious due diligence process — it fell short. The deal went to a competitor with the same technology, but also a documented AI governance framework.
This is not an anecdote. It is a pattern that is repeating itself rapidly throughout 2026.
Until 2024, AI was a topic that arose tangentially in due diligence: which AI tools do you use, do you have privacy risks, are there IP issues around training data? Useful questions — but not structuring for valuation.
In 2026, that has changed fundamentally. The largest private equity houses and strategic acquirers work with a formalised AI Governance Due Diligence Checklist that runs in parallel with the financial, legal and operational audit. They assess: the completeness and quality of the AI strategy, the maturity of the governance structure, the compliance position under the EU AI Act, the quality of the AI portfolio (which initiatives deliver demonstrable returns), and the presence of vendor lock-in risks.
AI governance is a valuation factor. Every executive board considering an exit, merger or growth capital round must have this in order now — not shortly before the deal. Due diligence reveals what is missing; it does not build it.
A documented AI strategy Not a PowerPoint presentation, but a board-approved document describing the AI ambition, the prioritised initiatives, the governance structure and the measurable objectives. Approved by the executive board — not merely written by consultants.
Demonstrable compliance An inventory of all AI applications, a classification under the EU AI Act, and documentation of conformity measures. Organisations that lack this are priced as a compliance risk.
A returns track record Which AI initiatives have been implemented, at what level of investment, and what did they deliver? Organisations that can show only pilots without returns data are priced as pre-mature.
Governance structure Is there an identifiable accountable party? Are there governance protocols? Is reporting made to the supervisory board? Governance without structure is not credible in due diligence.
Even if your organisation is not considering an exit or acquisition, this development is relevant. The valuation criteria applied by PE funds and strategic acquirers are a leading indicator of what institutional shareholders and the broader capital market will expect as standard in two to three years' time.
Moreover: the strongest reasons for sound AI governance are internal — better decision-making, lower risk, faster scaling. The fact that this governance also adds external value is a by-product that strengthens the business case, not the primary motivation.
Not just insight — but a plan your board can execute.