Potential Surge in Mergers: SoundHound AI as a Prime Acquisition Target

In recent years, high inflation and rising borrowing costs have led businesses to focus more on internal efforts, delaying acquisitions and special projects. However, as inflation eases and the Federal Reserve begins reducing interest rates, corporate balance sheets are improving. Additionally, there is speculation that Federal Trade Commission Chairwoman Lina Khan may resign soon, possibly paving the way for increased mergers and acquisitions in 2025, particularly if leadership changes under the incoming administration. SoundHound AI (SOUN 12. 60%), a company specializing in AI-powered voice-recognition assistants, is seen as a potential acquisition target. This technology uses natural language processing and machine learning to enable devices to understand voice commands, with applications in smart devices like thermostats and assistants like Amazon’s Alexa. The global market for speech recognition is estimated to reach $15. 9 billion by 2030. Major companies investing in this technology include: 1. **Alphabet**: Competes with Amazon through Google Home and Nest products. 2.

**Microsoft**: Acquired Nuance, focusing on healthcare and integrating with its cloud services. 3. **Apple**: Uses Siri and acquired Shazam. 4. **Nvidia**: Holds a stake in SoundHound AI. SoundHound AI is attractive for acquisition due to its unique B2B focus on sectors like hospitality and automotive, although it also has a B2C app akin to Shazam. Despite strong demand, it has not yet achieved profitable scale. Its high valuation, with a price-to-sales ratio of 46 and a market cap near $5 billion, could deter some buyers, yet it might benefit significantly from integration into a larger company with more resources.