Global mergers and acquisitions (M&A) volumes fell 9% in the first half of 2025 compared to the same period last year, according to PwC’s mid-year outlook. But that topline dip tells only part of the story, as deal values increased 15% year-over-year, highlighting a market driven more by strategic focus than by volume.
Technology led the value rebound. Tech M&A totaled $421 billion through the end of May, accounting for 25% of the $1.67 trillion in total global deal value, according to preliminary data from Dealogic published by Reuters. Of that tech total, nearly 75% was attributable to AI-related transactions.
The surge in AI-driven M&A reflects a broader industry push to develop and scale AI agents, a trend that, according to PwC, is expected to fuel deal activity through the second half of 2025 and beyond.
For founders, the implication is clear: positioning and strategic clarity are more important than ever. Simply being “in AI” or “in SaaS” is not enough. Buyers are looking for solutions that unlock infrastructure leverage, ecosystem value, or deliver long-term differentiation.
The growing dominance of AI infrastructure and AI agents
AI continues to shape how companies plan their investments and make acquisition decisions across the tech landscape. PwC highlights early 2025 megadeal activity as signaling both “scale and urgency.” Case in point: MongoDB’s acquisition of Voyage AI, which many saw as an early signal of an expected wave of strategic acquisitions focused on AI infrastructure, tooling, and agent technologies.
That urgency is also translating investments into infrastructure. Recently, Alphabet’s Google announced plans to invest $25 billion in U.S. data centers and AI infrastructure over the next two years.
While capital intensity is increasing, implementation strategies are changing. According to the International Data Corporation (IDC), only 13% of IT leaders now plan to build AI models from scratch, while 53% intend to start with pretrained models and refine them with proprietary enterprise data.
"Organizations are rejecting the binary build-or-buy question in favor of more nuanced approaches", wrote Deborah Perry, cofounder of the Work3 Institute, an AI and web3 advisory firm, in an article in Harvard Business Review.
"This shift toward strategic implementation, including the growing trend of strategic partnerships, recognizes that success with AI isn’t about how much you spend, but how intelligently you invest across build, buy, blend, and partner strategies."
In this context, founders should ensure they articulate how their solutions enhance enterprise AI adoption without adding unnecessary friction.
Recommended: What is agentic AI, and why is it redefining SaaS Value?
Tech deal value surges despite volume decline
In the first half of 2025, technology M&A volumes declined 11%, affected by macroeconomic pressures and persistent geopolitical volatility, according to PwC. However, deal value once again defied the trend, rising 15% across tech, driven by outsized transactions in infrastructure, AI tooling, and vertical platforms.
According to PwC, a diverse mix of buyers has fueled this rise in value:
- Hyperscalers are actively acquiring orchestration tools and developer platforms to support AI deployment.
- Large incumbents are seeking vertical integration across the AI stack, from chips to cloud to application layers.
Private equity’s selective re-entry into tech
Despite a capital-rich environment, PE buyers remain disciplined. Bain & Company reports $1.2 trillion in buyout dry powder globally, with nearly a quarter of that capital sitting idle for four years or more, creating pressure to deploy, but not at any price.
This dynamic is producing more deliberate dealmaking. The WEF notes that firms are gravitating toward:
- Secondary buyouts
- Continuation funds
- Preferred equity structures
For founder-led businesses backed by PE, or those considering PE exits, the message is clear: preparation must extend beyond financials. Competitive positioning, leadership continuity, and integration readiness are now central to how PE buyers evaluate platform fit.
In this environment, partnering with an M&A advisor can offer a valuable perspective on how these elements impact deal dynamics and investor engagement.
Read: AI rollups in 2025: What founders need to know
Regional shifts: Asia Pacific & The Middle East
Global M&A deal value reached $2.14 trillion from January through June 27, marking a 26% increase year-over-year. A significant portion of that growth came from Asia, where activity more than doubled to $583.9 billion, according to Reuters.
In Japan alone, M&A totaled $232 billion in the first half (its highest total on record), driven by outbound PE investments and large take-private deals. According to LSEG data, deals involving Japanese companies more than tripled in value during this period.
In the Middle East and Africa (MEA), S&P Global reported a 35% rise in M&A activity in Q1 2025 compared to the prior year, despite a slight decline in overall deal count. Israel led the region with 56 completed transactions.
While these regions are not core markets for most mid-market North American sellers, the capital flows are instructive, pointing to global interest in software and infrastructure assets that enable modernization and operational scale.
Cross-border buyers are increasingly prepared to look beyond traditional markets, particularly for AI, cybersecurity, and enterprise automation platforms.
Founders should consider how their company’s narrative resonates in global capital contexts and prepare accordingly for inbound interest or international strategic partnerships.
North America and Europe maintain relevancy
At the same time, North America and Europe remain the primary locations for strategic tech M&A activity, particularly in AI infrastructure, vertical SaaS, cybersecurity, and data platforms. These regions remain the most active hubs for deal-making in the mid-market, where buyer-seller alignment often hinges on ecosystem fit, go-to-market maturity, and regulatory familiarity.
According to Dealogic data, deal activity in North America rose to $1.04 trillion from January 1 through June 27, up 17% from the first half last year, according to preliminary data from Dealogic.
Strategic outlook for H2 2025
Looking ahead, several themes are expected to shape M&A strategy and timing in the second half of the year. Sellers should monitor the following:
1. Heightened regulatory oversight
In Europe’s side, the UK’s newly enacted Digital Markets, Competition and Consumers Act, along with mounting EU scrutiny, will make platform and AI-related acquisitions subject to tougher antitrust reviews.
Founders with platform-like offerings or significant data access should expect heightened diligence and potential deal structuring constraints.
2. AI convergence acceleration
Buyers are shifting from investing in standalone model labs to acquiring assets that enable:
- Orchestration
- Deployment
- Workflow integration at scale
Expect increased appetite for developer tooling and horizontal infrastructure that can scale across verticals.
3. Sector-specific consolidation
Several categories are likely to experience concentrated buyer interest:
- Data infrastructure: AI pipelines, orchestration tools, and model-ops platforms
- Developer tooling: Interfaces and integration frameworks for agent-based systems
- AI safety: Governance, monitoring, and secure deployment solutions
Stay ahead with the latest tech M&A market trends
The first half of 2025 has made clear that tech M&A is more concentrated, more strategic, and increasingly shaped by the evolution of AI.
For tech founders, this environment offers compelling opportunities, but only with the right preparation.
At L40°, we work with founders to understand directional shifts and act when the market presents the right opening. Whether you're considering a near-term exit or evaluating a specific opportunity, we help position your business with precision, ensuring the process reflects both your company's strengths and the market's momentum.
