INTRODUCTION Contributed by: George Casey, Linklaters
Overview Welcome to the fourth edition of Chambers’ Technology M&A Guide. Continuing with the momentum that has been built over the last three editions, we are pleased to broaden the scope of this year’s guide and, along with welcoming back our previous con- tributors, we extend a heartfelt welcome to our new participants from various countries. Notwithstanding major challenges that the industry has been facing over the last few years, technology M&A remains an important priority for many investors and companies. The growth in technology deals reflects both continuing con- solidation within the tech industry itself as well as the increasing direct investment in technolo- gies by traditional corporates in recognition of the strategic importance of staying at the fore- front of digital transformation. Artificial Intelligence (AI) continues to dominate the tech headlines and has quickly become a critical business asset across various sectors. Once just a futuristic concept for the majority of the population, AI (and particularly generative AI) has burst into our lives over the last two years and captured everyone’s imagination. Executives are constantly assessing how AI will change their businesses and industries, and many compa- nies have integrated or are planning to integrate the technology into their day-to-day operations. Lloyds Bank’s recently published ninth annual Financial Institutions Sentiment Survey high- lighted that two thirds (63%) of financial institu- tions invested in AI in 2024, a 32% increase from the previous year. The rise of generative AI is quite clearly bringing a digital change, and this is driving investment in
advanced technologies and digital infrastructure as a whole. Investing in Digital Infrastructure Powered by greater connectivity (including great- er adoption of 5G) and mobility, the increasing adoption of technologies such as AI, the inter- net of things and enterprise cloud computing are driving greater demand for higher computing capacity and data storage for the growing mass of digital data created and consumed worldwide. Despite the challenging macro environment and economic conditions, the outlook for digi- tal infrastructure investments – particularly data centres – remains positive globally. Additional data will need to be filtered in as gen- erative AI algorithms require massive amounts of training data to learn. As the algorithms become more complex, they also need to make multiple copies of that data. Large language models such as ChatGPT require vast amounts of comput- ing power to create and improve, which will also drive the need for data centres and supporting such specialised, high-performance computing platforms. The rise of “edge” computing (placing computing and data storage closer to where the processing takes place) is also driving the need for development of more data centres closer to cities and populations. The number of deals involving data centres has increased steadily over the years, recording a compounded annual growth of 32% from 2017 to 2022. After a relative lull in 2023, data from the Synergy Research Group shows that data centre-oriented M&A deals have bounced back in 2024 and are once again poised to pass the USD40 billion milestone.
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