AI’s Impact on M&A

M&A Trends in Tech - Acqui-hires are increasingly common in AI, with companies valuing the talent and expertise of acquired teams [2][3][4] - Smaller investments and acqui-hires can be viewed more favorably by regulators from an antitrust perspective [5] - M&A activity is picking up, with buyers in AI and digital infrastructure becoming more active [8] - Private equity firms have significant dry powder and are looking for deals [9] Factors Influencing M&A - Geopolitical conditions, tariffs, and events in Ukraine and the Middle East are key factors [10] - Interest rates are a key determinant of M&A activity; stabilization or improvement in the forward curve could boost deals [10] - Predictability in antitrust regulations is adding positive momentum to the M&A outlook [11] - Improvement in IPO markets is needed to provide private equity firms with exit opportunities [12] - A disconnect between buyers and sellers on valuation, influenced by interest rates, remains a challenge [14] Specific Areas of Activity - Traditional media companies are restructuring and reevaluating their portfolios due to the disruption of streaming [16] - Sports have become an area of growth and interest, driving up sports franchise values [17] - AI is a dynamic force in M&A, particularly in specialized hardware and hardware integration (software meeting silicon) [18] - Data center deals have doubled in 2024 compared to 2023, driven by the need for greater infrastructure and cloud services [21] Regulatory and Political Environment - The DOJ and FTC are signaling an openness to considering transactions with remedies [24] - The administration is focused on "America First" initiatives and ensuring equality of messaging, particularly for conservative viewpoints [26] - Companies need to understand the administration's objectives and incorporate government relations early in the deal planning [27] - Regulators are focused on tech, particularly regarding free speech issues, but are showing optimism by considering remedies [30]