AI is transforming everything. What's the deal for M&A?

Momentum heading into 2026 suggests that global M&A is entering a new phase. A late-2025 surge in megadeals (transactions more than $5bn in value) and AI thematic have carried into the new year, pointing to a market that is structurally reshaping rather than simply rebounding from a subdued cycle. Deal value is expected to remain elevated in 2026 even as volumes remain muted, with headline-making activity increasingly concentrated in the largest transactions and among the best-capitalized buyers.

Three forces are likely to define what’s next for M&A. First, AI is accelerating strategic change across industries; pulling forward decisions on scale, capabilities, data, and talent; and reshaping deal strategy and execution. Second, global dealmaking is becoming more polarized and K-shaped, with strength concentrated in a small number of markets, led by the US. This concentration is also evident across a narrow set of sectors, most notably technology. Third, the macroeconomic backdrop of decelerating global growth, lower interest rates, and abundant capital is reinforcing a two-speed M&A market in which confidence has clearly returned at the top end, while activity elsewhere remains more constrained.

Investment in AI is being directed towards data centers, energy, and other infrastructure as well as technology development and customization. In the near term, the scale of this multitrillion-dollar investment may divert capital and temper M

&A activity. Over the medium term, however, AI’s potential to trigger an innovation supercyclic is likely to reignite dealmaking as companies accelerate transformation, reposition portfolios, and acquire critical capabilities.