INTRODUCTION Contributed by: George Casey
Private equity and venture capital firms are also deploying record dry powder globally in targeting scalable tech platforms, with firms preferring M&A as a route to acquiring global talent and infrastructure in the tech sector. Deal count, however, remains subdued due to valua- tion pressures, continued economic and geopolitical uncertainty, and regulatory scrutiny. Buyers are now choosing to focus on quality over quantity, and mar- kets are more disciplined and value-oriented overall. Looking forward to 2026, tech M&A activity will likely be fuelled by strong corporate balance sheets, plenty of private equity dry powder, and a strategic push to “buy rather than build” new tech, enabling companies to quickly enhance their capabilities and stay ahead in a rapidly evolving sector. The technology M&A pipe- line remains strong, supported by improving financing conditions and expectations of moderating inflation. The AI Revolution Continues AI continues to dominate tech investment, attracting 50% of total global investment in the first half of 2025, with funding levels close to the full-year total for 2024. Rapid enterprise adoption and scaling of generative AI together with developments in agentic AI are driv- ing the latest wave of digital transformation. Gartner expects global AI spending to reach close to USD1.5 trillion in 2025 and to exceed USD2 trillion in 2026 as demand fuels digital infrastructure investment. For example, in Italy, domestic and international strategic buyers are increasingly acquiring technology com- panies to accelerate digital transformation, AI capa- bilities, cloud infrastructure and cybersecurity com- petencies, with consolidation allowing companies to achieve operational efficiencies in fintech, SaaS and AI-enabled platforms. Three years after OpenAI’s release of ChatGPT to consumers, enterprises across all industries are now embedding and scaling generative AI, which has reached its “impact moment” of delivering measur- able benefits for businesses. AI models are also being integrated into agentic workflows, involving teams of “digital workers” working autonomously, enhancing decision-making and improving regulatory responsive- ness well beyond simple responses to instructions.
Agentic AI is reshaping how businesses orchestrate workflows, reduce operational friction and accelerate value creation. AI’s outsized impact is evident, as it accounts for many of the industry’s largest transactions. Leading companies such as OpenAI (raising USD40 billion), Anthropic (raising USD13 billion), xAI (raising USD10 billion) and CoreWeave (with its USD1.5 billion IPO) are attracting record-level funding. Investment in AI will likely continue to attract the highest levels of investment, with investments ranging from small lan- guage models, robotics and agentic AI to AI-driven solutions for industries such as defence tech, health and biotech. AI is not just a vertical – it is a horizontal The surge in AI adoption across sectors has reshaped the digital infrastructure landscape supporting the technology. Demand for data centres has steadily grown and is expected to triple within the next five years. This has prompted a race to secure consistent carbon-neutral power sources to meet the growing energy demands. As mentioned, tech firms have been ramping up AI spending, forecasted to reach USD1 trillion on AI alone in the coming years and in turn benefiting sec- tors providing vital infrastructure such as chipmak- ers, power utilities and cloud service providers. For example, UK big tech firms have been projected to spend over USD300 billion on AI infrastructure in 2025, demonstrating the evolution of AI from a single subsector to the foundational infrastructure under- pinning the country’s technology ecosystem. Across jurisdictions, companies are investing in large-scale projects, such as: enabler across all tech subsectors. Demand for Digital Infrastructure • the USD500 billion Stargate project supported by OpenAI, Microsoft, Oracle, SoftBank and MGX to scale up US infrastructure; • the USD100 billion strategic partnership between OpenAI and Nvidia to build and deploy at least 10 gigawatts of AI data centres; • the USD5 billion collaboration between Nvidia and Intel to jointly develop multiple generations of cus- tom data centre and PC products; and
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