PwC analysis reveals AI-driven M&A gains momentum amid global deal divergence in 2026

AI-driven investment and a rush of megadeals have pushed global M&A into a distinctly uneven phase in which headline transactions and well-capitalised buyers are pulling ahead while activity elsewhere lags.

According to PwC’s 2026 outlook, momentum that began in late 2025 has carried into the new year, producing a market that looks less like a simple rebound than a structural shift. Deal value is expected to remain high in 2026 even as overall volumes stay muted, with much of the action concentrated in very large transactions and a narrow set of sectors led by technology. PwC frames this as a K-shaped market: pockets of intense activity and capital accumulation coexist with broader caution and constrained deal flow.

Central to that divergence is artificial intelligence. PwC’s industry analysis says AI is accelerating strategic decisions about scale, capabilities, data and talent and is driving cross-sector convergence: technology firms are moving into energy and power infrastructure, while industrial and health companies are acquiring analytics and software to embed AI in operations and R&D. The firm also notes a nuanced tempo to AI’s effect on deals. In the near term, multitrillion-dollar capital expenditure into data centres, energy and other infrastructure may divert investment and temper M&A volumes. Over the medium term, PwC argues, AI could catalyse an innovation supercycle that prompts portfolio reshaping and renewed acquisition activity as companies chase new revenue streams and efficiency gains.

The scale of last year’s megadeal wave underscores these dynamics. PwC Switzerland’s report highlights that global deal values rose sharply in 2025, by around 36%, while transaction counts were essentially flat, reinforcing the concentration of value in a small number of very large transactions. The Americas led the surge, with deal values jumping roughly 55%, driven largely by US megadeals. PwC’s mid-year update recorded 36 announced megadeals over $5bn in the first five months of 2025, up from 31 the year before.

Independent market reporting paints a similar picture. Mergermarket found that 2025 was marked by record-breaking megadeals and bold strategic bets, with North American M&A reaching about $2.65 trillion and notable October activity powered by multiple very large deals, including major data-centre transactions. The firm also identified technology and AI-related investments, such as bids and stakes in AI and security businesses, as dominant themes in cross-border activity as trade frictions eased and regulatory environments allowed larger transactions to proceed.

Macro conditions are reinforcing the two-speed market. PwC points to a backdrop of slowing global growth, lower interest rates and plentiful capital that has restored confidence at the very top end of the market but left mid-market and smaller buyers more circumspect. Private equity faces growing pressure to exit ageing portfolios, a dynamic PwC earlier flagged in its 2025 outlook, which highlighted how transformation and growth imperatives are pushing both corporates and financial sponsors toward M&A as a means to reshape business models.

Regionally, activity is uneven. PwC’s regional reviews cite double-digit increases in deal value across several Asia-Pacific markets, with China, India, Japan and South Korea all posting strong value growth, while EMEA saw softer volumes and values year‑on‑year, in part due to fewer megadeals in the UK compared with prior periods. India and parts of the Middle East registered notable rises in deal volume in 2025, reflecting widening appetites for strategic transactions outside the traditional US and European hubs.

For dealmakers, the immediate implications are pragmatic. Large, well-funded acquirers and sponsors will continue to pursue transformational and scale transactions, particularly where AI capability, data assets and infrastructure provide durable competitive advantage. Meanwhile, corporate and private equity players lacking deep pockets may delay or prioritise selective bolt-on and capability-driven deals until the investment wave into AI infrastructure matures and market clarity improves.

Industry watchers caution that the near-term capital expenditure supercycle could crowd out some M&A activity even as it seeds the technologies and assets that will underpin future dealmaking. In that sense, the current environment may be a paradox: heavy upfront spending on AI and related infrastructure that suppresses some transactions today while creating the strategic imperatives and asset bundles that will fuel the next wave of consolidation and strategic repositioning.