{"id":794,"date":"2026-09-02T11:30:58","date_gmt":"2026-09-02T11:30:58","guid":{"rendered":"https:\/\/www.athla.co.uk\/insights\/?p=794"},"modified":"2026-09-02T09:00:04","modified_gmt":"2026-09-02T09:00:04","slug":"ai-value-creation-in-relevant-places","status":"publish","type":"post","link":"https:\/\/www.athla.co.uk\/insights\/ai-value-creation-in-relevant-places\/","title":{"rendered":"AI value creation in relevant places"},"content":{"rendered":"

Looking for AI upside can be more or less obvious when undertaking a company valuation.<\/p>\n

<\/p>\n

We remained as busy as ever over the summer months with an increasingly varied set of valuation projects ranging from those for PE backed opportunities to others which were very gnarly. And there is a steady stream of work from employment related securities scenarios. What we know is that there is no such thing anymore as a \u201clite valuation.\u201d There is too much at stake, so we have agreed to continue our policy that every report gets the same degree of attention regardless of whether the company is worth a small fortune or whether it is just small. (That does not mean we refuse to do fixed fee work, especially if it will help a very special client of yours).<\/p>\n

Browsing the business pages is an excellent way to see where value is being created in the whole economy. I was particularly struck by this article in the FT<\/a> which discusses how the papers profits on investments in AI companies such as Chat GPT and Anthropic are contributing to the profitability of the FAANGs and how this is arguably distorting tech company valuations. Whether or not you believe we are in a bubble that is about to burst or still a long way off that scenario, what we get excited about is the issue of core: the value being placed on a company\u2019s core activities vs its investment portfolio. In our world this issue is just as important as for the world\u2019s largest businesses. In a private company valuation we have to be particularly careful in understanding what the nature of a company is. If it\u2019s undeniably a 100% trading company the treatment applied to establish value is very different to one that has a real or latent investment portfolio.<\/p>\n

Quality of the trading business matters. All revenues are not equal and to understand a company in full you need to understand the underlying nature and profitability of each revenue stream contributing to profits and losses. You also need to grasp and explain the likely future direction of travel around both revenue and profit, if at all possible.<\/p>\n

There are numerous ways to do this, even for start-ups, although even we must accept defeat if there is in sufficient data to form a firm opinion. We do not allow our analysts to consider non-board approved numbers into our valuations. If the data is not there we find a new approach that is defensible.<\/p>\n

Valuations of companies, including group companies with both an investment portfolio and trading activities need careful handling to build up the right valuation that everyone agrees with. It can get particularly interesting where a company owns physical assets upon which a trading business depends – think everything from land based trades to companies that might be investing in physical data centres to support their AI activities. \u00a0There is never a one size fits all option. Instead, you patiently dig deep until a focused picture of what is present and valuable becomes clear (by which I mean can be explained to a sensible adult!)<\/p>\n

This autumn we plan to keep developing our own skills and efficiencies so we can serve you and your clients faster and better. Our North Star is to value assets in a manner that is thorough and therefore defensible, as fast as you need us to, so you and your clients can get on with finishing up the project or transaction.<\/p>\n","protected":false},"excerpt":{"rendered":"

Looking for AI upside can be more or less obvious when undertaking a company valuation.<\/p>\n","protected":false},"author":2,"featured_media":795,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-794","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/posts\/794","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/comments?post=794"}],"version-history":[{"count":1,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/posts\/794\/revisions"}],"predecessor-version":[{"id":796,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/posts\/794\/revisions\/796"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/media\/795"}],"wp:attachment":[{"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/media?parent=794"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/categories?post=794"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.athla.co.uk\/insights\/wp-json\/wp\/v2\/tags?post=794"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}