Technology is quickly becoming one of the most active and dynamic sectors for mergers and acquisitions (M&A) in 2025. Despite a macro environment filled with uncertainty, technology deal activity reflects an appetite for growth, talent, and transformation.
Dealmakers entered 2025 with cautious optimism despite M&A volumes between 2022 and 2024 trailing historical averages. According to Mergermarket, global deal value rose more than 15% in Q1 2024 even as deal counts across North America, EMEA, and APAC fell to their lowest level in nearly two decades. North America followed a similar pattern with deal value rising modestly, even as the number of deals significantly declined year over year. These figures suggest that while fewer deals are being executed, companies are pursuing larger, more calculated transactions.
The technology sector continues to lead by both volume and value. In Q1 2025, several headline-making transactions demonstrated that buyers remain willing to deploy capital where innovation, infrastructure, or market share gains justify the investment. Japanese buyers also played a significant role with more than $42 billion in inbound US deals, reflecting continued interest in US assets and a deliberate push by Japanese firms to globalize their operations.
Yet the momentum has toned down due to persistent multifactor challenges. Inflationary pressures, trade and tariff concerns, consumer sentiment, and national security considerations all contribute to a complex backdrop. Technology deals also face heightened regulatory scrutiny when they involve cross-border elements or cutting-edge capabilities such as artificial intelligence (AI), data analytics, and cybersecurity.
For many acquirers, technology M&A remains an intentional priority. Companies are increasingly using acquisitions to gain access to innovation, expand ecosystems, and scale rapidly. Internal company development can struggle to keep pace with market expectations or technological advances, particularly in areas such as generative AI or quantum computing. As a result, buyers are pursuing targets with demonstrated capabilities, proprietary platforms, or skilled teams to accelerate growth timelines.
Acquisitions are also a way to enter new markets—whether geographic, sectoral, or demographic—without the time and cost associated with building from scratch. This is especially valuable for companies looking to expand global reach or enter adjacent industries through tech-enabled platforms.
Many deals also aim to neutralize competitive threats or solidify market leadership. Acquiring fast-growing startups or competitors allows established market players to protect their share and deliver integrated capabilities and services to customers. The rise of platform consolidation, particularly in cloud computing and SaaS, underscores how tactical acquirers are thinking beyond standalone products and toward holistic service offerings.
Technology M&A is increasingly subject to potential regulatory risk. In the United States, the Federal Trade Commission and Department of Justice have adopted more assertive postures toward market leaders and digital platforms, including evaluating deals through a forward-looking lens that focuses on potential—not just actual—anticompetitive effects. The Committee on Foreign Investment in the United States has also widened its scope in examining transactions involving foreign investors, critical technologies, or sensitive data.
The European Union has taken a similarly active stance. The Digital Markets Act imposes new compliance obligations on so-called gatekeepers and gives regulators more authority to scrutinize technology consolidations. Parallel enforcement by the European Commission and the UK’s Competition and Markets Authority has led to more delays, greater disclosure requirements, and in some cases deal abandonment. US state-level privacy laws, such as California’s Consumer Privacy Act, further complicate diligence and integration planning for tech deals, especially those involving consumer data or algorithmic decision-making.
Cross-border transactions now account for a broadening web of rules—from export controls to national security restrictions—and companies are increasingly tracking geopolitical developments and regulatory trends. These layers of oversight are especially relevant for deals involving AI, dual-use technologies, and cybersecurity infrastructure.
One of the more nuanced areas of potential risk in technology M&A involves the role of controlling stockholders, particularly in founder-led companies. It is common in the technology sector for minority stockholders—such as chief executive officers, serial entrepreneurs, or venture investors—to exert significant control over a company’s operations and direction. Under Delaware law, these individuals may still be considered controlling stockholders even if they hold less than 50% of the voting power.
Recent Delaware case law has broadened the circumstances under which control may be found, including transaction-specific control, i.e., where a stockholder influences a particular deal process. To address growing ambiguity and potential litigation risk, the Delaware legislature recently enacted amendments to the Delaware General Corporation Law clarifying when a non-majority stockholder may be considered controlling. Under the revised law, a stockholder who owns or controls at least one-third of the voting power and exercises managerial authority may be deemed controlling. This added clarity is particularly important in tech deals, where governance structures and investor dynamics are often complex.
Beyond financial metrics and legal frameworks, cultural alignment plays a critical role in the success of technology transactions.
It may be valuable to begin integration planning before the deal closes. Thoughtful attention to employee retention, customer relationships, and cultural onboarding can help avoid disruption. Joint ventures, alliances, and minority investments may offer a more flexible alternative to full acquisitions, particularly where cultural or regulatory considerations weigh heavily. However, even these structures call for alignment on goals, governance, and compliance, especially where sensitive technology or government oversight is involved.
Despite ongoing macroeconomic challenges, the technology M&A market shows no signs of slowing. AI-focused acquisitions, cybersecurity transactions, and fintech consolidations are expected to remain prominent. Cloud services, data infrastructure, and workflow automation tools will also likely continue to attract interest as companies seek to modernize operations and expand their digital capabilities.
Private equity remains a major player in the space, accounting for more than $17 billion in deal value in Q1 2025. As valuations stabilize and capital becomes more selectively deployed, companies that are agile, considerate, and culturally attuned can position themselves to take advantage of these opportunities.