Technology

What you need to know

• A market still below its peak: Global tech M&A has stabilised since early 2025 after a 55% fall from its 2021 peak, but H1 2026 deal volume remains below the long-run median.
• AI is the dominant driver: Acquirers are targeting AI-native platforms and the infrastructure behind them – data centres, semiconductor design and computing capacity.
• Fewer yet more deliberate deals: Strategic acquirers and megadeals are supporting value, while traditional SaaS targets face increasing scrutiny from sponsors.
• Regional divergence: Gulf capital is driving Middle East tech activity, Europe is focused on semiconductors and strategic autonomy, and APAC remains concentrated in semiconductors and hardware.
  

Technology - the M&A state of play

"Tech M&A" refers to mergers and acquisitions involving technology-driven companies, where the value of a deal typically lies in intangible assets such as software, intellectual property, and technical talent rather than physical infrastructure. This industry encompasses a broad range of sub-sectors such as software and SaaS, semiconductors, fintech, cybersecurity, artificial intelligence and machine learning, among others, adjacent to pure-tech M&A deals are deals in the associated infrastructure such as data centres. The sector's breadth and pace of innovation make it one of the most active and closely watched segments of the global M&A market.

Over the past decade, global Tech M&A has followed a pronounced boom-and-bust cycle. Deal activity ramped steadily through 2017–2019, establishing a baseline of elevated volume and count before the COVID-19 disruption triggered a sharp dip in early 2020. The subsequent policy response, characterised by low interest rates and higher liquidity, fuelled an unprecedented surge, with quarterly deal volumes peaking around US$500 billion and deal counts nearing 5,000 by 2021. However, from mid-2022 onward, rising interest rates, tightening credit conditions, and a recalibration of growth expectations triggered a sharp and sustained contraction. Deal volumes and counts fell markedly through 2023 and into 2024, a decline of roughly 55% from the 2021 peak. Since early 2025, activity has begun to stabilise. Into the first half of 2026, deal volume remains below the long-run median, suggesting that valuation compression persists and buyers continue to exercise discipline.

The US mid-term election results have market participants closely watching for any overtures of changes to regulatory settings to AI and data centres. The election result may bring increased uncertainty for the tech sector and levels of tech M&A. While the Democrats will control both chambers, it is not expected that there will be immediate changes to leadership at the FTC and DOJ. However, there will be more democratic oversight of these executive agencies which could bring increased scrutiny of consolidation in the tech sector, including as a result of tech M&A.

Several structural trends underpin this evolving landscape. Artificial intelligence has emerged as the dominant strategic driver, with acquirers targeting not only AI-native platforms but also the foundational infrastructure that supports them: data centres, semiconductor design, and computing capacity. The market is now defined by fewer but more deliberate transactions, with capital concentrating around assets that offer durable competitive advantage in an increasingly AI-enabled economy.

US Tech M&A

US Tech M&A over the past several years has largely followed the global experience described above. Deal count per half-year declined over the past several years, from a high of 2,793 deals completed in H1 2022 to 2,052 in H2 of 2025 (and an average of approximately 2,087 deals per half-year from H1 2022 through H2 2025). In addition, after peaking at approximately US$592 billion in H1 2022, aggregate deal volume in the US Tech M&A segment fell significantly through H2 2024 (before partially recovering in 2025), with a low of US$129 billion in H1 2023 (and an average of approximately US$308 million volume per half-year following the high from H1 2022 through H2 2025). These volumes were supported in part by a number of marquee tech M&A transactions, including Microsoft’s acquisition of Activision Blizzard (~US$69 billion), Broadcom’s acquisition of VMware (~US$ 69 billion), and Elon Musk’s take private of X (f/k/a Twitter) (~US$44 billion). In 2026, both deal volume and deal count increased from H2 2025 to H1 2026 by approximately 30% and 13%, respectively, with H1 2026 deal volume (approximately US$617 billion) the highest half-year total since H1 2022.

The metrics above only paint a partial picture of the US Tech M&A landscape over the last five years, which has seen significant subsector dispersion. For the traditional SaaS platform target, acquirors, particularly financial sponsors, have become more scrupulous in their acquisitions, stemming in part from higher costs for debt financing, gaps in valuation and deterioration in M&A premiums following the broad deployment of artificial intelligence. In this environment, deal volume has continued to be supported by strategic acquirors, in many cases infrastructure, hardware and cloud compute acquirers, which (following significant equity investments) are seeking acquisition targets with a built-out customer base to promote revenue growth. Similarly, strategic acquirers continue to pursue agentic AI-driven platforms to support existing product development, such as SpaceX’s acquisition of Cursor (~US$60 billion) (which contributed significantly to the uptick in US AI deal volume in H1 2026, to approximately US$319 billion, as shown below). We expect these trends to continue through H2 2026.

EMEA Tech M&A

EMEA Tech M&A activity over the past decade has broadly followed the global cycle while showing its own regional features. The market peaked in 2021, a record year for European technology M&A, in which European M&A across all sectors rose 47% to US$1.26 trillion. The correction that followed was sharp, with total European deal value falling 43% in 2022, and transaction numbers dropping 12% from 21,282 to 18,808. European tech M&A value, according to Mergermarket data, came to approximately €89 billion for the whole of 2023. A recovery in deal value began in 2024, and gathered pace in 2025, when European M&A value rose 24% to approximately US$1 trillion, with US and Gulf-based acquirers accounting for roughly 28% of regional deal value in the second half of the year. In 2026 the pattern has been rising value on falling volume, with deal value supported by megadeals. Overall European M&A value reached US$661.5 billion in the first half of 2026, the highest half-year total since the second half of 2021, while deal volumes fell 17.8% on the previous half-year. In the Middle East, by contrast, sovereign-backed capital has made technology, media and tele-communications the most active sector, with 76 deals in the first half of 2026, up from 54 a year earlier.

From a sub-sector perspective, EMEA reflects the global divide between AI-linked assets and the wider software market. In Europe, Application Software recorded the sharpest fall in deal numbers, while semiconductor targets still command premium valuations. Gulf investors have focused on AI infrastructure at home and abroad, most notably MGX and BlackRock's US$40 billion acquisition of Aligned Data Centers, which closed in July 2026. Strategic and private equity-backed consolidation continues, including cross-border SaaS add-ons such as cisbox's acquisition of Oxalys (France to Germany) and Wooclap's acquisition of Vevox (UK to Belgium). Semiconductors and AI infrastructure are becoming more prominent, reflecting Europe's focus on strategic autonomy and chip capacity. Recent deal flow includes Qualcomm's US$2.4 billion acquisition of UK-based Alphawave Semi to support its data centre strategy and Intel's €9.9 billion sale of a stake in its Irish Fab 34 facility to Apollo. Newer themes are also shaping regional deal flow in AI, cybersecurity and defence technology.

APAC Tech M&A

APAC Tech M&A activity over the past decade has mirrored the broader global cycle whilst displaying distinct regional characteristics. Half-yearly deal counts have trended upwards over the past five years, rising from 112 transactions in the first half of 2022, to a high of 171 in the second half of 2025, before easing slightly to 164 in the first half of 2026. Half-yearly deal volume has been more volatile, falling from approximately $US32.6 billion in the first half of 2022 to approximately US$15.3 billion in the second half of 2022, the lowest level recorded in the period and remaining between approximately US$20 billion and US$32 billion through 2023 and 2024. A meaningful recovery emerged in 2025, with half-yearly volume peaking at approximately US$61.4 billion in the first half of 2025 before moderating to approximately US$38.6 billion in the second half of 2025 and rebounding to approximately US$48.5 billion in the first half of 2026.

From a sub-sector perspective, APAC deal activity remains concentrated in semiconductors and hardware, particularly in China, Japan, and South Korea, reflecting the region's strategic focus on chip self-sufficiency and advanced manufacturing capabilities. Recent deal flow indicates continued activity in semiconductor materials (such as the proposed US$3.4 billion acquisition of SK Siltron by Doosan) and inspection equipment. Software and SaaS transactions have become increasingly prominent in India, Singapore, and Australia, driven by digital transformation and enterprise technology adoption. Emerging activity in AI, robotics, and cybersecurity across the region underscores the growing importance of next-generation technology themes in shaping APAC deal flow, with recent transactions spanning AI voice platforms, data centre REITs, and automation solutions.