A Goldman Sachs logo is displayed on the floor of the New York Stock Exchange in New York City, on Wednesday, August 11, 2010.
Ramin Talaie | Corbis Historical | Getty Images
The global mergers and acquisitions boom that defined 2025 is carrying into 2026, as companies reassess their portfolios and artificial intelligence-led demand fuels large-scale transactions. However, a tightening capital pool is forcing executives to be more selective than ever.
Despite a sluggish start as Trump’s sweeping tariffs early last year briefly scuttled acquisitions and new public listings, the total value of deal-making activity surged 40% to $4.9 trillion in 2025, according to Bain & Company’s annual M&A report.
That marked the second-highest level on record, trailing only the $5.6 trillion peak in 2021, when low borrowing costs and buoyant equity markets propelled a historic dealmaking frenzy.
Dealmaking activity last year rebounded as central banks cut interest rates, valuations improved and companies increased spending on artificial intelligence.
Markets are betting that the surge will continue, as Wall Street regains its appetite for large deals amid the prospect of lower borrowing costs.
A Bain survey of 300 M&A executives found that 80% expect to sustain or increase deal activity this year, citing improved macroeconomic conditions and a growing backlog of private equity and venture capital assets awaiting exit.
As abrupt shifts in trade policies settled into a pattern of less threatening change, relief turned into confidence and then a fear of missing out.
Jake Henry
Global co-leader, McKinsey’s M&A Practice.
Goldman Sachs, drawing on its own poll of 600 corporate and financial sponsor clients, found that 57% believe scale and strategic growth will be the primary driver of deal decisions this year.
“As abrupt shifts in trade policies settled into a pattern of less threatening change, relief turned into confidence and then a fear of missing out,” said Jake Henry, global coleader of McKinsey’s M&A Practice.
Central to the shift is a decisive push by companies to reassess their portfolios, as geopolitical risks, economic fragmentation and uneven global growth force boards to reconsider where they operate and the risks they are willing to take.
“Leaders across industries recognize that many traditional business models have reached the limits of their historical growth engines,” said Suzanne Kumar, executive vice president of Bain’s global M&A and divestiture practice.
“Companies urgently need to reinvent themselves to get out ahead of the big forces of technology disruption, a post-globalization economy, and shifting profit pools,” Kumar added.
Goldman topped the global M&A ranking last year, advising on nearly 40 deals worth $1.48 trillion in total volume. It marked the strongest period for mega-deals by volume, according to Reuters, citing LSEG records dating back to 1980.
Still, companies remain cautious. Boston Consulting Group’s M&A sentiment index rebounded to 75 from its low in late 2022 — but still remained well below the long-term average of 100, reflecting “an improving but cautious stance.” A higher value than the prior month indicates that M&A market momentum is accelerating, while a lower value suggests a deceleration.
Tightest funding squeeze in decades
While the appetite for deals remains strong, the pool of discretionary capital to fund them is historically thin, forcing executives to pursue only transactions that deliver clear returns.
The proportion of capital allocated to M&A hit a 30-year low in 2025, according to Bain, as companies directed more cash towards dividends, buybacks, capital expenditures as well as research and development.
“Executives must pressure test whether M&A pathways and specific deals will help the company better compete in the most attractive markets … rethink portfolio boundaries, and make bigger, bolder decisions about what capabilities they must own vs. access,” said Kumar.
“As competing demands for capital raise the bar for deals, disciplined reinvention and value creation are essential,” she added.
The funding crunch has pushed private capital to the center of dealmaking. Private equity firms are seeking to deploy idle cash, borrowers are turning to private credit funds for flexibility, and sovereign wealth funds are increasingly acting as lead investors rather than passive backers.
Private equity now accounts for roughly 40% of global M&A activity, according to Goldman. Despite signs of stress in the private credit market — now valued at roughly $2.1 trillion — Goldman expects the asset class to more than double by 2030, broadening the pool of capital available to fund large transactions.
AI capital expenditure ‘supercycle’
Blockbuster deals are fueling the resurgence in M&A, powered by AI-related demand, according to industry reports.
Mega-deals valued at greater than $5 billion accounted for more than 73% of the increase in deal value in 2025, according to Bain.
The number of deals exceeding the $10 billion threshold swelled to 60 last year, the highest level since 2021, said McKinsey’s Henry.
“We expect more big deals in 2026, with continued consolidation and geographic expansion,” Henry said, with AI-related service providers fueling “big-deal fever” this year.
However, the heavy capital spending in AI could constrain M&A activity in the near term, Brian Levy, global deals industries leader at PwC, said.
As AI adoption accelerates, demand for computing power has surged across digital infrastructure, energy, semiconductors, and hardware optimization. In response, many companies are opting to acquire rather than build across the technology stack.
Between the first quarter of 2024 and the third quarter of last year, U.S. hyperscalers’ capital expenditures averaged $760 million per day, according to Goldman Sachs.
The Wall Street bank estimates that by 2030, another 65 gigawatts of data center capacity will come online — more than double the amount added from 2019 to 2024.
“Investment in AI is being directed towards data centres, energy, and other infrastructure as well as technology development and customisation,” Levy said.
“In the near term, the scale of this multitrillion-dollar investment may divert capital and temper M&A activity.”
