For companies focused on growth and scale, the traditional model of pursuing innovation through research and development (R&D) does not work. Markets move very quickly, especially when it comes to developing and releasing AI-based tools and systems.
Example: It can take months to develop an initial concept for a new health care product, as noted by Pacific Research Laboratories. And after that, months of design, beta testing, and planning will be required before the product hits the market.
While this innovation timeline makes sense, it can leave the company behind. Truth be told, if an innovation takes more than a year to launch, it's likely to be out of date by the time it's available to the public.
Faced with this reality, many companies take the “Why innovate when we can invest?” a channel for innovation. Rather than building products and software from scratch, they make deals with companies that have already done benchmarking. Basically, they buy new things. As a result, merger and acquisition (M&A) activity is increasing in many industries.
Faster Survival through M&A
To be sure, taking M&A shortcuts to bypass traditional R&D processes is not a new concept. Take the merger of Disney and Pixar, for example. Merging the two organizations 20 years ago allowed both types share technology and develop their capabilities in a highly competitive and highly profitable market.
However, the M&A activity that is happening now is not just between corporate-level companies like Disney and Pixar. From April 2026 in the United States IM&A reports from EY Parthenon exhibitions, also take place between businesses in the market. For executives evaluating acquisitions, one of the most important questions is what AI tools can help identify specific areas of value creation and new growth before a deal is finalized. In total, those deals contribute to forecasts that put global M&A activity at more than $3.8 trillion by 2026.
Are all those M&A activities motivated by the desire to move forward with new strategies? Maybe not. But “innovation” is on the minds of many corporate leaders, especially in new AI-related fields.
Getting to Market Begins Without Cutting Corners
It is not difficult to understand why companies interested in producing new AI products take the M&A route. The pace of AI evolution has made internal R&D cycles of many years obsolete. Just think about the recent history of ChatGPT: It was launched globally at the end of 2022 and quickly moved the pole on how fast the AI industry was expected to move. (Interestingly, the prototypes of ChatGPT he was in the R&D stages for several years before the major public release of OpenAI.)
After ChatGPT's shake-up, its competitors have no choice but to accelerate their R&D and bring productive AI products to market right away. ChatGPT resets the pace of the AI race, and the race is on.
However, it's worth mentioning that not all AI innovations are worthy of corporate M&A. Only the most promising AI tools and technologies will create new value and growth for organizations. Currently, this includes agent AI solutions, industry-focused AI tools, and robotic AI prototypes.
For example, AI agent systems are popping up everywhere. Why? This type of AI product is capable of making autonomous decisions. When AI “agents” are tasked with solving problems, they use logical thinking to come up with answers. Rather than simply downloading information, they can search for information themselves and then consult their way to possible answers. Also, many AI systems use different agents that can communicate, such as interconnected teams of professionals working together.
Obviously, agent AI systems are complex to build, meaning R&D can take years. By taking on AI-nimble firms that have already spent time and energy on their R&D, a mid-market or enterprise-level company that wants to offer AI options to its customers can jump in quickly.
Plug-and-play Innovation as a Futuristic, permanent trend
This move towards skipping the lab and going straight to the wire doesn't mean companies won't invest in having their own R&D teams. In contrast, internal R&D is still developing in many organizations.
That said, being able to buy new things instead of building them can be a huge win for both parties. After all, big companies can't wait to delight their customers with new products. And small tech startups that have put the sweat equity into R&D but lack the heft of a big company can enjoy a faster runway to bring their inventions to market.
