AI’s increasing impact on M&A

AI isn’t just transforming business—it’s also having a major impact on global M&A activity. In PwC’s recent global M&A industry trends 2026 outlook, AI is a central theme. The technology is accelerating strategic change across industries; pulling forward decisions on scale, capabilities, data, and talent; and reshaping deal strategy and execution.

Among the key findings:

Larger deals are carrying the market
Global deal values increased by 36% in 2025, driven by roughly 600 transactions above US$1 billion, while value across the remaining approximately 47,000 transactions was flat year over year. Looking at deal volume, mid-market and smaller transactions, which account for the majority of M&A activity, remain subdued, with confidence uneven and dealmaking increasingly selective. The result is a K-shaped market, with large, US-led and technology-based deals driving activity, while the rest of the market remains constrained by valuation gaps, execution risk, and lingering uncertainty.

AI is triggering relentless capital spending today …
The multitrillion-dollar expenditure required to build AI infrastructure and capabilities has the potential to divert capital away from M&A in the near term. External estimates suggest that between $5 trillion and $8 trillion could be required over the next five years to fund AI technologies and the enabling infrastructure. To put that in context, global M&A values totalled around $3.5 trillion in 2025.

… and could be a deal catalyst tomorrow
Over the medium term, however, AI is likely to spur a large increase in dealmaking. If the technology delivers even a portion of its promised productivity and transformation gains, it could trigger a powerful innovation supercycle, reshaping business models across industries.

It’s already a factor in the largest deals
Our analysis of the 100 largest corporate M&A transactions from 2025 shows that approximately one-third cited AI as part of the strategic rationale. Technology, manufacturing, and power and utilities are the sectors where AI is mentioned most often. In the technology sector, nearly all the largest transactions announced in 2025 referenced AI in their deal rationale.

Based on those findings, the outlook highlights specific recommendations for dealmakers, including private equity and corporate executives:

Expect volatility. Regardless of whether the AI boom lasts, leaders should plan as if markets are in a bubble. This means scenario planning for a range of outcomes, including a correction, and ensuring resilience through liquidity, flexible financing, and clear contingency strategies.

Stay disciplined regarding capital allocation. AI’s strategic importance brings both incremental operating costs and substantial capital requirements, pushing executives to make deliberate choices on capital allocation. That means carefully evaluating short- and long-term returns, modelling multiple outcomes, and prioritising investments aligned with strategic objectives.

Make AI due diligence a core part of every deal. Dealmakers should assess a target’s AI strategy and road map, estimate the potential impact of AI on the business over the next three to five years, evaluate operating and capital requirements, and test management’s ability to execute.