Image Source: Nick Youngson CC BY-SA 3.0 Alpha Stock Images

Although caution is still present surrounding global M&A activity, there’s a tangible level of ambition that’s begun to flow into markets following a flurry of major acquisitions. 

Across industries like entertainment, video gaming, transportation, and retail, huge takovers throughout 2025 have amounted to around $4.5 trillion in M&A activity last year, making it the second most lucrative on record. 

Data also shows evidence of rapidly accelerating momentum moving into 2026, suggesting that the new year will be a strong backdrop for increased activity. 

Global M&A activity was up 10% over the first nine months of 2025, with deal volumes rallying to $1.938 trillion between January and September compared with the $1.763 trillion recorded during the same period in 2024. 

However, the second half of last year marked a major uptick in activity. The third quarter of 2025 alone saw eight megadeals valued in excess of $10 billion close, representing a scale that hasn’t been seen since Q4 2018. 

Given that it’s taken Wall Street and other global markets many years to overcome the wariness that was spawned from a sharp downturn throughout 2022, owing to a severe upturn in inflation in the wake of the pandemic, there appears to be growing optimism that 2026 can truly turn a corner and address a long-standing M&A backlog. 

Cautious Ambition

When discussing the M&A outlook for 2026, Stephan Feldgoise, global head of M&A at Goldman Sachs suggested that the year could be summed up in three words: “technology, globalization, and ambition.” 

However, recent investor fears over the whirlwind growth of the artificial intelligence sector are likely to instil a wider sense of caution for the year ahead, particularly as some investors have begun to associate the AI boom with a market bubble. 

Caution and ambition will punctuate the M&A outlook for 2026, with a normalization of monetary and regulatory conditions helping to pave the way for further growth in the months ahead. As a result, business planning firm Namaste Management has forecasted deal volumes to climb between 10% and 12% over the course of the year. 

Despite this, the true volume of M&A deals for 2026 is likely to hinge on the performance of the artificial intelligence sector, and a resumption of the AI boom throughout the year could see volumes rise 15% or more compared to 2025 activity. 

As a means of managing risk, AI players are increasingly likely to optimize their portfolios by adopting a ‘buy and build’ strategy rather than banking on one-off transformative deals. 

Buying and building is more practical for supporting rapid business expansion while building a higher level of resilience against factors like tariff uncertainty. 

AI to Drive M&A Efficiency

Another factor that appears set to drive mergers and acquisitions in 2026 will be the development of AI as a supportive technology to assist in deals of all shapes and sizes. 

The use of artificial intelligence in the M&A process throughout different industries is still low compared to other industries. According to KMPG data in its Germany-focused M&A outlook 2026 report, just 3% of companies use agentic AI solutions, while 13% have adopted generative AI within their operations. 

However, there’s evidence of growing trends when it comes to AI adoption. Data shows that 35% of companies are piloting agentic AI applications or plan to use them within the next year, while 31% are making similar movements when it comes to generative AI. 

Today, AI is most widely used in due diligence processes, with 77% of companies and 70% of private equity (PE) firms using the technology to analyze large data rooms and documents. Meanwhile, 83% of respondents believe that AI will improve the integration and separation process in future mergers and acquisitions. 

Although many PE and family office investors have identified poor data quality and availability as a key hurdle in AI adoption, there’s a widespread expectation that artificial intelligence will soon become a driving force for M&A activity. 

With 77% of survey respondents expecting technological transformations such as AI will drive transactions in the years ahead, we could see the artificial intelligence boom assist an upturn in mergers and acquisitions in 2026 and beyond. 

M&A Activity in 2026

The proliferation of mega deals towards the end of 2025 has prompted a wave of cautious ambition among firms eyeing acquisitions in the new year. 

Although we haven’t yet seen companies fully address the backlog of M&A deals that slowed due to market uncertainty in 2022, there’s growing optimism that 2026 could be a record-breaking year for activity. 

The artificial intelligence boom appears likely to have the final say in the scale of M&A ambitions over the year ahead. But with the technology capable of assisting deals, there could be a symbiotic relationship between M&A activity and AI at play over the foreseeable future. 

Evidence of accelerating deal momentum means that 2026 could be a year to remember for mergers and acquisitions, and the uptick in deals is likely to present plenty of opportunities for investors along the way. 

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