The Surging AI M&A market

The M&A market for artificial intelligence companies has surged over the last few years, almost tripling from 430 M&A deals in 2020 to 1277 in 2024. That growth is continuing in 2025, as indicated by the 381 deals transacted in the first quarter ‒ a rise of 21% over Q1 2024’s volume. Total M&A deal value for AI providers has also trended upward, spurred by megadeals of over $1 billion. For example, the disclosed M&A deal value in the AI sector in Q1 2025 was $21.6 billion, driven primarily by seven megadeals. Although it should be noted that the total deal value is actually higher because only 15% of the transactions in the quarter disclosed deal values, as buyers prefer to keep their M&A strategies private. 

And interest in doing M&A deals in the AI market is widespread, spanning both financial and strategic acquirers, with PE firms involved in more than 20% of the transactions each year from 2020 to 2025.

Looking across all 29 market sectors that Corum tracks, AI was the one consistent M&A driver across all of them in 2024.

What's driving the growth? 

The surge in M&A deals for AI companies is primarily driven by the potential value of AI across a spectrum of industries. Companies see AI as way to improve decision-making, drive innovation and creativity, and improve customer experiences ‒ all of which can provide them with a competitive edge. And it's that need to have a competitive edge, or even simply to stay competitive, that underlies a lot of the increased demand for AI capabilities, demand that is being satisfied in many cases through M&A deals with AI providers. 

The “oil” that fuels AI 

Corum Senior Vice President Dr. Ivan Ruzic notes that businesses and governments have bought into the fact that AI is the future. He says, “AI is going to drive developments into probably the next half century or more.” And just like oil that was the fundamental resource driving the industrial revolution, the “oil” that is fundamental to the profusion of AI, according to Ruzic, will be the infrastructure provided by data centers and hyperscalers that enable the use of AI in the way that industry wants it to be available. 

Fear of missing the train

Fear is also driving of AI deals. "There's so much interest in AI," Ruzic says, "because everyone is scared of falling behind and missing the train. And so they're all looking for AI-enabled technology that will give them an edge that they can turn into something sustainable."

Rapid evolution of AI technology

Yet another factor driving these deals is the rapid evolution of the technology, which can quickly make a company's AI-related solutions irrelevant. Consider the early solution space around ChatGPT as an example. Ruzic recalls, "When ChatGPT first came out there were a lot of third party vendors that jumped on the bandwagon because they knew that it couldn’t access the Internet. So someone wrote an app that let ChatGPT talk to the Internet. Or they knew that ChatGPT didn’t analyze financial data. So somebody wrote an app that allowed ChatGPT to do that. But as the models continued to evolve and they became multimodal, those applications became redundant. The rapid improvements in the technology made these applications unnecessary." 

Ruzic adds that if you're one of those vendors and you see the writing on the wall, you’ll want to monetize what you've built as quickly as possible before it becomes irrelevant. That too drives a lot of AI M&A activity. 

Financial and strategic partnerships

Ruzic also notes that many entrepreneurs in the AI space are looking for a partner ‒ a private equity firm or a portfolio company ‒ with a strong balance sheet that can accelerate their growth and sustain or accelerate the momentum they've already built up. These situations are also driving AI M&A deals.

What application areas are seeing high volume of AI deals?

Three application areas that are seeing a particularly high volume of AI-related M&A deals are healthcare, customer service, and marketing. 

Healthcare

M&A deals are being made to enhance various aspects of healthcare, such as diagnosis and treatment, personalized care, as well as operational efficiency. For example, AI is being used to analyze medical images such as X-rays and scans with high accuracy, potentially detecting diseases earlier and more precisely. A recent M&A deal related to AI use in healthcare is French radiology company Gleamer's acquisition of CAERUS Medical, a company that utilizes AI to improve lumbar spine MRI interpretation, offering precision in detecting disc herniation, stenosis , and other findings. The acquisition allows Gleamer to offer a comprehensive suite of AI solutions for various imaging modalities.

Customer Service

From chatbots and virtual assistants that handle customer questions and provide instant responses, to predictive analytics that can help businesses anticipate customer needs, AI is transforming customer service, improving customer experience and helping businesses better service their customers.

And that AI-based customer support is evolving from providing assistance, to acting as a more full-fledged agent that can provide a wider range of capabilities. For example, Walmart recently introduced a GenAI-powered shopping agent called Sparky in its customer app. The agent goes beyond answering product questions. It can act much like a human advisor, such that if a customer is planning a cookout, Sparky can check the weather, suggest menus, and help schedule delivery of supplies.

Some large M&A deals have been made recently in light of this trend toward agentic AI. For example, in a $2.85 billion megadeal, cloud-based platform provider ServiceNow recently acquired AI company Moveworks. By combining ServiceNow's capabilities with Moveworks' agentic AI orchestration platform, the aim is to create a powerful AI agent that can increase productivity and improve customer experience. 

Marketing

AI is being used in every aspect of marketing ‒ from crafting personalized email campaigns and generating content, to managing social media and optimizing ad campaigns. For example, GenAI can automate various aspects of content creation, including generating blog posts, social media captions, and emails. AI can also help identify trending topics, optimize content for search engines (SEO), and personalize content for different audience segments. 

An example of a recent M&A deal in this space is the purchase of OneClick Technologies, a GenAI and customer experience solution provider, by DataLens, a Singapore-based data engineering and AI solutions company. The acquisition will enable DataLens to enhance the operational efficacy of its clients by streamlining customer service workflows and supporting the delivery of personalized messages using GenAI and automation.

Other application areas

Healthcare, customer service, and marketing are not the only application areas that are seeing AI-related M&A deals. AI is impacting a broad range of sectors such as cybersecurity, telecommunications, manufacturing, and media and entertainment. And M&A deals are being transacted in all of those areas.

What does the future hold for AI-related M&A?

As AI becomes more sophisticated, it will continue to drive acquisitions of AI companies in the future ‒ possibly even an increased pace of these types of deals ‒ particularly among the biggest tech players. Major tech companies such as Google, Amazon, Microsoft, and Nvidia have made significant investments in AI to fuel their future growth.

In addition, acquiring AI companies and AI talent is critical for businesses to continue to innovate, scale, and sustain a competitive edge. Ruzic sees it this way: "Everybody, including governments, jumped onto the AI bandwagon, and it took off because they recognized that it is strategically important. But AI adoption is also driven by its benefits; it’s faster, cheaper, safer, and better. Actually, it doesn't even have to be better. It just has to be the same or close enough. As long as it's safer, cheaper and faster, people will adopt it." And when people adopt AI in dramatically increasing numbers and companies see the need to acquire AI technologies and talent to stay competitive, can M&A deals be far behind?