Cooley’s 2025 Tech M&A Year in Review: Tech M&A Revival – Big Deals Keep on Turnin’

Despite early macro-headwinds, tech dealmakers were active in 2025, anchored by strategic acquirers making decisive moves to improve their positioning in a rapidly changing market environment and private equity sponsors undertaking audacious mega-cap take-privates not seen since 2007. Tech M&A increased 36% and 9% year over year by deal value and volume, respectively, and as we predicted this time last year, there were more than five $10 billion+ tech deals[1] announced.[2] The foundation of this heightened activity was enhanced dealmaker confidence driven by a more predictable regulatory review environment, rising markets and abundant available acquisition financing. However, despite the headline-grabbing mega deals and sharply increased deal values, the more muted year over year increase in deal volume illustrates the stark reality that the tech M&A market remains a story of haves and have nots, as lower-growth companies and companies in sectors facing artificial intelligence (AI) headwinds continued to face a choppy path to an exit.

AI remained the defining theme across tech M&A, influencing both which assets were acquired and how they were valued. Strategic acquirers and financial sponsors alike pursued transactions to expand AI capabilities, secure foundational inputs or reposition portfolios for an increasingly AI-intensive operating environment. Let’s take a closer look at the key trends that drove tech M&A in 2025.

AI as the throughline: Talent and infrastructure

AI remained the central throughline across much of tech M&A in 2025. Nearly half of strategic technology deals exceeding $500 million involved AI-native targets or acquisitions where buyers explicitly cited AI-driven revenue growth, cost savings or competitive positioning as a key rationale.[3] The focus extended beyond end-user software applications to include proprietary datasets, access to compute capacity, and organizational capabilities required to deploy AI at scale.

Mega-acquihires – a $1 billion+ transaction where the buyer is predominantly focused on acquiring talent and a license (which may be nonexclusive) to the target’s core intellectual property and/or commercial access to the target’s key technology, rather than the entire business – emerged as a defining feature of AI-driven M&A in 2025. This trend was particularly prevalent among mega-cap tech buyers competing for a limited pool of world-class AI talent and seeking to avoid the potentially lengthy regulatory reviews of whole-company acquisitions. We saw at least four mega-acquihires over the course of the year and expect more to follow in 2026.

A notable example was Google’s July 2025 transaction with Windsurf, where Google reportedly paid $2.4 billion in cash to Windsurf in exchange for a nonexclusive license to Windsurf’s core IP and hired Windsurf’s CEO, co-founder, and certain key research and development (R&D) personnel.

Another form of mega-acquihire is the nonvoting minority investment structure first popularized by Microsoft and OpenAI. In 2025, Meta reportedly made a $14.3 billion investment in Scale AI for a 49% nonvoting stake (valuing the company at more than $29 billion) and hired its founder.[4] Regulators in the US and Europe signaled growing interest in scrutinizing such talent-focused deals structured not to require merger control filings, but in 2025, these structures remained an efficient way to acquire specialized human capital quickly.

While talent and IP acquisitions were key drivers of AI-related M&A, a boom in M&A tied to the “picks and shovels” of the AI megatrend also picked up steam, with data center and energy M&A particularly active throughout the year, highlighted by a consortium comprising the Artificial Intelligence Infrastructure Partnership, MGX, and BlackRock’s Global Infrastructure Partners’ approximately $40 billion acquisition of Aligned Data Centers and Constellation Energy’s over $26 billion acquisition of Calpine.[5]

Mega- and large-cap tech step back in

After several years of relative restraint, mega-cap strategic buyers demonstrated renewed willingness to pursue large-scale M&A. A more predictable antitrust environment and the clearance of Hewlett Packard Enterprise’s $14 billion+ acquisition of Juniper Networks with a targeted divestiture package emboldened boards and leadership teams, with Alphabet, IBM and Salesforce each pursuing $8 billion+ deals. As we predicted last year, large-cap (but not mega-cap) tech buyers also remained key drivers of M&A activity, with OpenAI, Palo Alto Networks, and ServiceNow, among others, each announcing $5 billion+ transactions over the course of the year, and serial acquirers like Atlassian churning out multiple $500 million+ transactions. Strategics announced 21 acquisitions of US public tech companies in 2025 – up significantly from the 16 announced in 2024, and exceeding the number of tech take-private acquisitions by private equity firms for the first time since 2022.

Cybersecurity was a particularly active area for strategic consolidation. Google’s agreement to acquire Wiz, an AI-native cloud security company, for approximately $32 billion reflected the growing imperative for platform companies to strengthen cloud security amid expanding AI workloads. Similarly, Palo Alto Networks’ $25 billion acquisition of identity-security leader CyberArk, one of the largest pure-play cybersecurity combinations of the year, expanded its platform in identity and privileged access management.[6]

The year also reinforced the accelerating convergence of technology, media and entertainment assets, highlighted by the ongoing takeover battle for Warner Bros. Discovery. In December 2025, Netflix and Warner Bros. Discovery reached an agreement for Netflix to acquire Warner’s film, television and streaming assets in a transaction valued at $82.7 billion.[7] Paramount Skydance responded with a hostile all-cash bid valuing the enterprise at $108.4 billion, demonstrating the critical importance of technology-enabled streaming to the future economics of media companies.[8]

Financial sponsors: Take-privates, clubbing and long-duration capital

Coming off a strong 2024, financial sponsors continued to pursue take-private transactions in 2025. There were 18 take-privates of US-listed tech companies by private equity sponsors in 2025, down slightly from the 19 in 2024, but still up from the 16 in 2023.[9] Thoma Bravo was again the most active participant, accounting for more than 20% of all tech take-privates with four transactions, while Bending Spoons and Francisco Partners each completed two take-privates, and Haveli Investments completed one take-private, reflecting the growing competitiveness of new entrants alongside established sponsors. Vista Equity Partners, however, was notably absent from the take-private landscape in 2025, after several years of consistent participation.

The year also saw a marked rise in cross-border sponsor activity, headlined by Italy-based Bending Spoons’ acquisitions of Vimeo, AOL and Eventbrite. In parallel, the resurgence of consortium or “club” transactions continued to shape the upper-end of the market, highlighted by the Saudi Public Investment Fund (PIF), Jared Kushner-led Affinity Partners and Silver Lake teaming up to take private Electronic Arts (EA) for $55 billion, the largest all-cash take-private in history, as well as Permira and Warburg Pincus agreeing to acquire Clearwater Analytics for $8.4 billion.[10]

Several transactions showed sponsors partnering with long-duration capital – including sovereign wealth funds – to fund outsized equity commitments in a market where traditional fund capital alone may have been insufficient. In addition to PIF leading the EA take-private, an affiliate of the Abu Dhabi Investment Authority made a sizeable minority investment alongside Thoma Bravo to help clinch the $12.3 billion take-private of Dayforce.[11] These deals highlight the growing role of Middle Eastern sovereign capital in supporting large sponsor-led technology acquisitions and demonstrate that parties have gotten comfortable managing associated Committee on Foreign Investment in the United States (CFIUS) risks.

Navigating regulatory and political complexities remained central to sponsor-led deals. For example, TikTok’s US operations were restructured under the ownership of a group controlled primarily by American investors, including Oracle, Silver Lake and UAE-backed MGX, to address national security and regulatory requirements.[12] Similarly, the US government participation in the semiconductor sector, such as Intel stock acquisitions linked to the CHIPS Act, illustrated the intersection of industrial policy and private capital.[13]

Looking ahead to 2026, sponsors should have access to ample cash to pursue deals as both equity and debt financing markets remain hot, although sponsors with large existing portfolios of software businesses with questionable positioning for the AI-first future may face headwinds in both fundraising and deploying new capital.

Regulation, antitrust and industrial policy

Regulatory considerations continued to weigh heavily on tech M&A in 2025, with antitrust enforcement remaining the dominant theme. As deal volume remained relatively subdued, market participants began to test the regulatory waters. The US agencies have thus far offered clearer – yet still demanding – enforcement priorities, enabling more informed risk allocation and transaction planning.

Large, high-profile transactions continued to face extended and in-depth review processes, but the year also demonstrated that lower-risk deals could still receive antitrust clearance. Antitrust risk remained a core diligence and negotiation focus, shaping reverse termination fees, regulatory covenants and timing mechanics across transactions.

Agencies also continued to explore novel theories of harm, particularly around data access, AI model training inputs and collusion on nonprice terms, adding complexity for acquirers of platform assets and AI-adjacent technologies. However, the implementation and practical effect of such theories remain to be seen, as the current administration has been less willing than the prior one to push the envelope on such theories. Instead, traditional concerns, such as horizontal overlaps resulting in high market shares, have returned as the primary driving force behind agency actions.

Across jurisdictions, enforcement divergence persisted. Europe and the UK pursued assertive and sometimes expansive approaches, with the Competition and Markets Authority (CMA) and European Commission scrutinizing even nontraditional theories of harm. This divergence reinforced the need for early, multijurisdictional regulatory mapping and more sophisticated remedies planning. Despite subdued volumes, billion-dollar tech transactions continued to attract disproportionate scrutiny, with review timelines extending by several months on average compared to pre-2022 levels.

By contrast, the CFIUS environment remained relatively stable. Sensitive AI acquisitions by Chinese buyers remained complex or even off-limits, but most other transactions proceeded within established expectations. Global foreign direct and indirect investment regimes continued to expand and tighten incrementally, adding cost and complexity without fundamentally altering deal feasibility.

US industrial policy and government involvement in strategic technologies formed an increasingly visible backdrop to tech dealmaking in 2025. Government incentives, funding programs and strategic investment priorities influenced capital flows into semiconductors, critical materials and adjacent technologies, shaping both acquisition targets and financing structures. The growing alignment between industrial policy and regulatory scrutiny meant that government priorities increasingly influenced not only deal feasibility but also valuation and competitive positioning. As Lazard’s CEO observed, Washington’s industrial strategy has become a durable feature of the investment landscape, with direct implications for M&A decision-making.[14]

Looking ahead, dealmakers expect regulatory scrutiny to remain elevated but still predictable, enabling more nuanced risk allocation and potentially unlocking pent-up strategic activity as macro-conditions stabilize. Successful transactions will continue to hinge on early regulatory mapping, robust data-driven competition analyses and deal terms that allocate regulatory risk with greater precision.

Looking ahead to 2026

We predict:

The continued prevalence of mega-acquihires, with at least four completed over the rest of the year, especially in key focus areas like AI and quantum computing.
At least two $20 billion+ mega-cap tech deals.
A jump in take-privates and mergers-of-equals transactions for publicly traded software companies facing significant investor concerns about the long-term stability of their business models in a potential enterprise “code it yourself” world enabled by AI coding tools.
A steady drumbeat of defense tech deals as rising geopolitical unrest continues to drive further innovation and VC investment in the space.
Increased focus on a “winning Washington” strategy in clearing high-profile tech transactions.
The increasing importance of sovereign wealth funds and family offices in financing tech take-privates, especially as large club deals return to prominence.
Tech-focused PE sponsors facing significant pressure from their limited partners to exit COVID-era software investments getting creative to salvage reasonable returns, including through continuation vehicles and mergers with public companies.

Don’t hold your breath for:

A broad-based boom in tech M&A. There will continue to be the haves and have-nots, with many former high-flyers facing limited options to transact their way to relevance in the “new normal.”
Direct competitor-to-competitor mergers among large-cap tech. While strategics are pulling off large deals, it is still far from open season from a regulatory clearance risk perspective, with buyers carefully selecting targets in adjacent markets.

Tech M&A volumes may not yet be roaring back, and we may not have crystal clear waters ahead of us, but for dealmakers focused on transformative transactions, mergers are rollin’, rollin’, rollin’.

[1] Cooley 2024 Tech Year in Review, Cooley’s 2024 Tech M&A Year in Review: We’re So Back (It’s So Over), February 3, 2025.

[2] Bain & Company, Looking Back at M&A in 2025: Behind the Great Rebound, December 2025; Bain & Company, Global M&A stages great rebound in 2025 with $4.8 trillion deal value to mark second-highest total on record, December 11, 2025; LSEG, The State of Global M&A: 2025; and Cooley analysis.

[3] PwC, Mid-Year Outlook 2025; EY, Q3 Global M&A Industry Trends; Boston Consulting Group, Global M&A Report 2025.

[4] Financial Times, Meta invests $15bn in Scale AI, doubling start-up’s valuation, June 12, 2025; Business Wire, Scale AI Announces Next Phase of Company’s Evolution, June 12, 2025.

[5] Wall Street Journal, BlackRock Group Buys Aligned Data Centers in $40 Billion Deal, October 15, 2025.

[6] Palo Alto Networks press release, Palo Alto Networks Announces Agreement to Acquire CyberArk, the Identity Security Leader, July 30, 2025; Financial Times, Palo Alto Networks agrees $25bn takeover of CyberArk July 30, 2025.

[7] Netflix press release, Netflix to Acquire Warner Bros. Following the Separation of Discovery Global for a Total Enterprise Value of $82.7 Billion (Equity Value of $72.0 Billion), December 5, 2025, ahead of publication.

[8] Financial Times, Warner Bros to rebuff $108bn Paramount hostile offer, December 16, 2025.

[9] Cooley 2024 Tech Year in Review, Cooley’s 2024 Tech M&A Year in Review: We’re So Back (It’s So Over), February 3, 2025; Cooley 2023 Tech Year in Review, Cooley’s 2023 Tech M&A Year in Review: An AI-Generated Glass Half Full, February 1, 2024.

[10] LSEG, The State of Global M&A: 2025; Cooley analysis of Deal Point Data.

[11] Dayforce press release, Dayforce Enters into US$12.3 Billion Definitive Agreement with Thoma Bravo to Become a Private Company, August 21, 2025; Reuters, Dayforce to go private in $12.3 billion Thoma Bravo acquisition, August 21, 2025; Forbes, ADIA’s Subsidiary Takes Minority Stake in $12.3B Dayforce Deal by Thoma Bravo, August 21, 2025.

[12] National Public Radio, TikTok signs deal to give U.S. operations to Oracle-led investor group, December 18, 2025.