Key Takeaways
- • Private equity firms are increasingly active in cross-border mid-market M&A, with 73% of all U.S. PE buyouts in 2025 concentrated in the middle market, totaling over 4,000 transactions worth $410 billion—up 16% in deal count year-over-year.
- • AI has become the dominant M&A catalyst: roughly one-quarter of all megadeals ($5 billion+) carry an AI theme, and nearly half of all technology M&A deals in 2025 included an AI component, up from one in four the prior year.
- • Global M&A deal value reached a record $4.9 trillion in 2025, surpassing the 2021 peak, with technology transactions driving over one-quarter of all mega-deal activity and AI-native companies commanding premium multiples across buyer categories.
- • Despite geopolitical headwinds and trade policy uncertainty, 2025 is on pace to be the strongest year for large deals by volume since 2021, with 144 large deals ($1–5 billion) and 47 megadeals ($5 billion+) recorded through early September alone.
- • PE exits are increasingly directed toward corporate buyers seeking recurring-revenue, data-rich assets in cybersecurity, enterprise software/data platforms, insurance brokerages, and payment infrastructure, with investment banks and PE firms now leveraging AI-driven insights to refine valuation models and M&A strategy.
Summary
Private equity and artificial intelligence have emerged as the twin engines driving cross-border M&A activity in the mid-market segment, fundamentally reshaping dealmaking patterns in 2025 and early 2026. According to PwC analysis, 73% of all U.S. private equity buyouts in 2025 were middle-market transactions, representing more than 4,000 deals worth $410 billion—a 16% increase in deal count year-over-year. This concentration in mid-sized acquisitions reflects a deliberate pivot by PE firms away from megadeals amid geopolitical tensions and trade policy uncertainty, with capital instead flowing toward strategically resilient sectors and cross-border opportunities where regulatory and competitive dynamics favor smaller, more agile transactions.
AI has become the single most important catalyst for M&A growth across all deal sizes. Approximately one-quarter of megadeals valued at $5 billion or more now incorporate an AI theme, spanning data center products, AI-related power infrastructure, and integration of AI capabilities into acquirers' core offerings. In the broader technology sector, nearly half of all M&A deals in 2025 carried an AI component, nearly double the proportion from the prior year. This trend extends beyond traditional acquisitions: major technology companies are also executing "acquihires"—securing AI talent, licensing intellectual property, or taking minority stakes—often strategically structured to minimize antitrust exposure.
The overall M&A market reflects record-breaking momentum despite macroeconomic headwinds. Global M&A deal value reached $4.9 trillion in 2025, surpassing the previous high set in 2021, with technology transactions representing over one-quarter of mega-deal activity. Through early September 2025, deal volume stood at approximately 7,700 transactions of all sizes, up 3% year-over-year, generating $1.1 trillion in disclosed deal value—a 26% increase over the same period in 2024. Large deals ($1–5 billion) and megadeals ($5 billion+) are driving this surge: if current pacing continues, 2025 would record 17% more large deals and 31% more megadeals than 2024.
PE activity is reshaping exit dynamics by bolstering megadeal volume while most PE exits direct proceeds toward corporate buyers rather than financial sponsors. Strategic acquirers are prioritizing recurring-revenue, data-rich assets in cybersecurity, enterprise software and data platforms, scaled platform businesses such as insurance brokerages, and payment infrastructure providers. Investment banks and PE firms are increasingly deploying AI-driven insights to refine M&A strategies, optimize valuation models, and identify overlooked cross-border opportunities. Concurrently, acquirers across all size categories—from Fortune 500 corporate development teams to growth-focused PE firms—are paying premium multiples for AI-native companies, reflecting the calculus that acquiring proven AI capabilities is faster and more cost-effective than building equivalent capabilities from scratch. This dynamic has intensified as private AI companies raised over $226 billion in Q1 2026 alone, surpassing the full-year 2025 total in a single quarter.
AI has become the single most important catalyst for M&A growth across all deal sizes. Approximately one-quarter of megadeals valued at $5 billion or more now incorporate an AI theme, spanning data center products, AI-related power infrastructure, and integration of AI capabilities into acquirers' core offerings. In the broader technology sector, nearly half of all M&A deals in 2025 carried an AI component, nearly double the proportion from the prior year. This trend extends beyond traditional acquisitions: major technology companies are also executing "acquihires"—securing AI talent, licensing intellectual property, or taking minority stakes—often strategically structured to minimize antitrust exposure.
The overall M&A market reflects record-breaking momentum despite macroeconomic headwinds. Global M&A deal value reached $4.9 trillion in 2025, surpassing the previous high set in 2021, with technology transactions representing over one-quarter of mega-deal activity. Through early September 2025, deal volume stood at approximately 7,700 transactions of all sizes, up 3% year-over-year, generating $1.1 trillion in disclosed deal value—a 26% increase over the same period in 2024. Large deals ($1–5 billion) and megadeals ($5 billion+) are driving this surge: if current pacing continues, 2025 would record 17% more large deals and 31% more megadeals than 2024.
PE activity is reshaping exit dynamics by bolstering megadeal volume while most PE exits direct proceeds toward corporate buyers rather than financial sponsors. Strategic acquirers are prioritizing recurring-revenue, data-rich assets in cybersecurity, enterprise software and data platforms, scaled platform businesses such as insurance brokerages, and payment infrastructure providers. Investment banks and PE firms are increasingly deploying AI-driven insights to refine M&A strategies, optimize valuation models, and identify overlooked cross-border opportunities. Concurrently, acquirers across all size categories—from Fortune 500 corporate development teams to growth-focused PE firms—are paying premium multiples for AI-native companies, reflecting the calculus that acquiring proven AI capabilities is faster and more cost-effective than building equivalent capabilities from scratch. This dynamic has intensified as private AI companies raised over $226 billion in Q1 2026 alone, surpassing the full-year 2025 total in a single quarter.
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