AI‑Driven Deals Split Global M&A Market into Two Speed Zones

Headline figures suggest the M&A market has recovered, with BCG reporting $1.6 trillion in deal value for the first half of 2026, Bain citing $2.4 trillion for the first five months and PwC forecasting about $4 trillion for the full year. However, almost half of that value comes from megadeals above $5 billion. When those large transactions are excluded, overall deal activity is down, revealing two distinct markets.

At the top end, AI is the clear catalyst. PwC found roughly one‑third of the 100 largest corporate deals in 2025 cited AI as a strategic rationale, and nearly every large deal in the technology sector did. The AI‑driven capital is flowing mainly into infrastructure—data centers, compute power and energy—where demand is visible and contracts are in place, driving extraordinary valuations. By contrast, traditional software and application‑layer companies face structural pressure and lower confidence, reflected in BCG’s technology sentiment index of 52, the lowest among sectors.

This shift is pulling M&A into non‑software areas such as utilities, energy and even nuclear power, as hyperscalers seek to secure the power generation needed for AI workloads. Meanwhile, the middle‑market segment (companies valued $50 million‑$500 million) remains subdued, with persistent valuation gaps and higher financing costs.