I got the call at 8:47 on a Tuesday morning. A client’s CTO, voice tight with stress: “Sarah, did you see the announcement? Our AI vendor just got acquired.”

This wasn’t the first time I’d heard those words. Won’t be the last, either. The AI M&A market is moving fast—CB Insights reports over $43 billion in AI acquisitions in the past 18 months alone. If you’re running AI in production, there’s a decent chance your vendor will get bought within the next two years.

Here’s what I’ve learned from helping Australian enterprises navigate these transitions.

The First 48 Hours: Don’t Panic (Yet)

Your first instinct might be to freak out. Resist that urge.

Most acquisitions don’t mean immediate product death. The acquiring company usually wants the revenue stream, the talent, or the technology—not to alienate paying customers. I’ve seen enterprises make rash decisions in the first week that cost them millions and months of productivity.

Instead, do this: Read the press release carefully. Check the acquisition announcement for specific product commitments. Then—and this is crucial—schedule calls with your account team within 48 hours. Not next week. Now.

Map Your Dependencies (Before You Forget)

You’d be surprised how many organizations don’t actually know how deeply integrated their AI vendor is. I worked with a Melbourne-based financial services company last year that thought they were using their AI platform for “just chatbots.” Turned out it was woven into their risk scoring, customer segmentation, and fraud detection systems.

Create a dependency map immediately. Document every API call, every integration point, every dataset that flows through that vendor’s systems. You’ll need this whether you stay or leave.

Include the people dependencies too. That amazing solution architect who knows your setup inside out? They might be gone in three months when their retention bonuses expire.

The Four Questions That Actually Matter

Strip away the corporate speak in those reassuring vendor emails. Here’s what you really need to know:

1. What’s happening to pricing? Acquirers didn’t spend $50 million to keep charging you the same rates. Get written commitments about pricing stability. If they won’t give you 12-18 months guaranteed, that tells you something.

2. Is the product roadmap changing? That feature you’ve been waiting for? It might have just vanished. I’ve seen acquiring companies shut down entire product lines within six months because they competed with internal offerings.

3. Where’s the data going? This is especially critical for Australian enterprises dealing with GDPR or Australian Privacy Principles. Your data might now be stored in different jurisdictions. Your compliance team needs to know yesterday.

4. Who’s still around? Ask specifically about the engineering team, your account manager, and the founder if they were involved. High attrition in the first quarter post-acquisition is a red flag.

Your Three Strategic Options

You’ve got choices. None of them are perfect, but some are better than others depending on your situation.

Option One: Stay and Negotiate If the product’s solid and the acquirer seems committed, this might work. But don’t be passive. This is your negotiating window. Negotiate contract extensions with price protections, SLA guarantees, and exit clauses. A Perth mining company I advised negotiated a full data portability guarantee and got it—because they asked within the first month.

Option Two: Parallel Path Start building or testing an alternative while maintaining your current system. It’s expensive—I won’t pretend it isn’t. But for mission-critical AI systems, it’s often worth the insurance policy. Many firms including the team at Team400 recommend this approach for large-scale deployments.

Option Three: Fast Exit Sometimes you just know it’s over. If the acquiring company has a competing product, if your data sovereignty is compromised, or if key people are leaving en masse—start planning your migration immediately. I helped a Sydney healthcare provider migrate off an acquired AI platform in four months. It was brutal, but staying would’ve been worse.

The Hidden Costs Nobody Talks About

Even if you stay, budget for these:

• Training staff on whatever changes are coming (count on 15-20% productivity loss during transition)
• Legal review of new contracts and terms of service
• Potential re-integration work when APIs inevitably change
• Security audits if data handling changes

For a mid-sized enterprise, I typically see $200,000-$500,000 in “transition tax” even when staying with an acquired vendor. For a full migration? Triple that, minimum.

The Silver Lining

Here’s the thing: Sometimes an acquisition makes your vendor stronger. Bigger company means better infrastructure, more resources, potentially faster innovation. I’ve seen it happen.

But that only works if you’re strategic about it. Use this moment to reassess your entire AI strategy. Maybe you’ve been too dependent on a single vendor anyway. Maybe this is the push you needed to bring some capabilities in-house.

The enterprises that come out ahead aren’t the ones with the best luck. They’re the ones who treated the acquisition announcement as a forcing function to get disciplined about their AI stack.

Your vendor got acquired. It’s not ideal, but it’s also not the end of the world. You’ve just got to move fast, ask hard questions, and make decisions based on your business needs—not on reassuring corporate press releases.

And maybe, just maybe, keep a backup plan warm from now on.