AI-Centric M&A Activity Sees a Resurgence: A Year of Transformation in Dealmaking
The Rise of AI in Dealmaking
Following a few challenging years, the landscape of mergers and acquisitions (M&A) is witnessing a revival, largely driven by the burgeoning field of artificial intelligence (AI). The renewed interest in this area emphasizes the transformative potential AI holds for various industries.
CoreWeave’s Landmark Acquisition
On Monday, CoreWeave (CRWV) initiated the 2025 AI-linked M&A trend with a bold announcement: a $9 billion acquisition of data center infrastructure powerhouse, Core Scientific (CORZ). While deal enthusiasm typically rallies investor sentiment, this particular announcement resulted in a distinct downturn, with shares for both companies dropping significantly by over 3% and 17%, respectively, post-announcement.
A Mixed Yet Promising M&A Landscape
Despite a tepid environment for dealmaking in the first half of 2025, developments indicate a pulse of activity. The current year has recorded around $750 billion in US M&A deals — a modest rise compared to $720 billion in the same period of 2024, as reported by The Wall Street Journal. This modest growth points to a cautiously optimistic outlook as we move ahead.
AI’s Growing Footprint in M&A Transactions
Out of the $750 billion in total transactions, AI-related M&A deals have made significant contributions, amounting to $65 billion, representing nearly 10% of the total. This year alone has seen more than 240 deals involving AI startups, contrasting with 454 total deals in the preceding year, reflecting both heightened interest and robust ongoing engagement in the AI sector according to data gathered from Mergermarket and reported by PYMNTS.
A Second-Half Surge Expected
Market experts hold a hopeful perspective that the AI feeding frenzy could fuel further growth in M&A activity during the latter half of the year. The anticipation is that companies aiming to position themselves as leaders in this rapidly evolving sector will intensify their acquisition efforts.
Strategic Importance of AI in Dealmaking
According to Matthew Warner, an M&A attorney at Clifford Chance, a driving factor behind the surge in AI deals is the opportunity for companies with financial flexibility to assert their leadership in this nascent field. Warner emphasizes that “This unique opportunity to become a new standard bearer helps prop up valuations and drives M&A deal activity because it’s an opportunity that will exist only for this moment in time.”
Salesforce’s Aggressive Strategy
In May, the Salesforce (CRM) juggernaut initiated an $8 billion all-cash acquisition of Informatica (INFA), a cloud data management provider driven by AI. This acquisition highlights Salesforce’s commitment to strengthening its AI infrastructure, paving the way for further advancements in customer relationship management through technological integration.
Hewlett Packard’s Strategic Moves
In July, Hewlett Packard Enterprise Company (HPE) followed suit by completing its own significant move: a $14 billion all-cash acquisition of Juniper Networks (JNPR), a specialist in AI-native network technology. This acquisition signifies HPE’s intent to enhance its offerings in the vibrant AI and networking space.
Alphabet’s Major Investment in Cloud Security
Notably, one of the standout deals in the tech-AI sector this year was Alphabet’s (GOOG, GOOGL) announcement in March regarding its $32 billion all-cash acquisition of Wiz, a cloud security specialist. This strategic decision aims to considerably fortify Alphabet’s cloud capabilities, highlighting the expanding interface of AI and cybersecurity.
AI’s Effect on the Power Sector
AI-driven transactions have transcended traditional tech boundaries, also making significant inroads within the power sector. A prime example is Constellation Energy’s (CEG) $16.4 billion cash-and-stock acquisition of Calpine Corp., a private natural gas provider. This move positions Constellation as the nation’s largest independent power provider, emphasizing how AI’s influence spans various sectors.
Capital Infusion from Tech Giants
Complementing these M&A movements, major players in technology are also ramping up their investments. Meta (META), Microsoft (MSFT), Amazon (AMZN), and Alphabet are collectively projected to allocate $325 billion towards capital expenditures and investments in AI this year, significantly amplifying the competitive landscape.
Looking Ahead: Headline-Grabbing Deals
Anticipation remains high that companies perceived as behind in AI will undertake notable acquisitions, mirroring the aggressive strategies already observed in 2025. Warner predicts that organizations at the forefront of AI may opt for smaller, more strategic acquisitions to reinforce their positions and consolidate their market share.
Strategic Stakes in AI Growth
Scale AI, a data annotation specialist, underscored the trend by confirming that Meta secured a 49% stake in the company worth $14.3 billion in June. Concurrently, Oracle (ORCL) announced a monumental cloud deal expected to generate $30 billion in annual revenue.
Continued Investment by CoreWeave
Echoing the momentum in the industry, CoreWeave also made headlines earlier in May with its $1.7 billion acquisition of AI application developer Weights & Biases. Such acquisitions underline the aggressive stance of companies intent on fortifying their capabilities within the AI realm.
A Shift in Revenue Dynamics
In a comprehensive report by UBS, it was noted that AI-driven revenue from startups significantly outpaces that of already large public corporations. This revelation could prompt larger firms to vigorously pursue AI capabilities through strategic acquisitions, similar to Salesforce’s move for Informatica.
The Future of AI-Centric Acquisitions
“There will undoubtedly be both large and small acquisitions in the AI market akin to what we’ve seen in the early months of this year,” Warner stated in an interview. As companies begin to integrate AI more deeply into daily operations, the opportunities for growth and innovation will continue to flourish.
Conclusion: The Dawn of a New Era in Dealmaking
The AI-driven M&A landscape is evolving rapidly, fueled by strategic acquisitions, robust investment, and strong market interest. As companies embrace the transformative potential of AI, we can expect continued growth and innovation throughout the sector. This surge in activity signals a shift in how businesses engage with technology, promising to reshape industries and drive future advancements. The intersection of AI and M&A is indeed a space to watch as 2025 progresses.
