Tech M&A Had a Decent Year. The Big One is Yet to Come.
Plus, Disney & OpenAI do a deal while SpaceX prepares its IPO launch
The Week in Short
M&A teed up to break out of the tech megadeal drought in 2026. SpaceX & Anthropic tease IPO prospects. Naveen Rao reinvents the seed round with $475 million. Boom Supersonic takes in $300 million for power-turbines. David Sacks was busy, encouraging President Trump to greenlight Nvidia H200 sales to China & spearheading an executive order to block state AI regulations. Disney & OpenAI do a deal. Google wins one at the Pentagon.
The Main Item
Easing of Antitrust Scrutiny, Plus AI, Could Bring Megadeal Energy to Silicon Valley
Plenty of venture investors are celebrating the rebound of M&A in 2025, which even more than the return of IPOs has created much-needed exits for VCs and their LPs.
Yet the scope and scale of the activity was still pretty modest by historic standards, especially considering the enormous growth in the market cap and cash-generating abilities of the major tech companies. Antitrust worries in particular have dented big M&A for years.
Now, though, assuming the industry’s shameless sycophancy towards President Trump yields the expected results on the antitrust front, the stage is set for some deal-making that will put the 2025 numbers to shame. Talk this week of possible IPOs from SpaceX and Anthropic gives a flavor of what could come.
“With the decrease in interest rates, positive earnings in the growth sector, continued positive corporate earnings, and the growth of AI, we believe that across the ecosystem, it’s going to be a very strong year for M&A in the next 12 months,” said Rick Heitzmann at FirstMark Capital.
Megamergers have never been that commonplace in tech, and the biggest one ever — AOL-Time Warner — stands as a cautionary tale. Still, some simple math, plus a little AI, make it obvious why more and bigger deals are likely on the way.
Consider for starters the biggest tech acquisition announced in 2025: Google’s $32 billion buyout of cybersecurity startup Wiz (the deal hasn’t closed yet so isn’t included in the chart data below). That’s a big number by any normal standard, but so is Alphabet’s market cap, not to mention its earnings. Alphabet could pay for Wiz with just its net income from Q3 and still have a couple of billion left over. Wiz’s value is pegged at well under one hundredth that of Alphabet.
By comparison, IBM’s $34 billion acquisition of Red Hat in 2019 came when the company once known as Big Blue was barely worth $100 billion. Salesforce spent almost $28 billion for Slack when its market cap was about $200 billion. Even Facebook wasn’t yet worth a trillion when it bought WhatsApp for $22 billion back in 2014. Amazon’s $13.7 billion acquisition of Whole Foods back in 2017 (when the online retailer was worth less than $500 billion) was arguably a bigger strategic move than any acquisition since.
In other words, the 2025 M&A uptick notwithstanding, major tech companies haven’t done much M&A recently that’s commensurate with their enormous size, or game-changing in any way for the companies or the industry. The closest was probably Microsoft’s $75 billion buyout of Activision-Blizzard, the second-biggest tech merger ever, but even that looks modest compared to what easily could be imagined.
Anthropic, for example, is reportedly valued at $350 billion following its recent announcement of deals with Nvidia and Microsoft, and is laying the groundwork for a 2026 IPO. Heitzmann thinks Anthropic is a prime acquisition target for a very big company that wants to make a very big move in AI; it’s easy to see the appeal for an Apple or an Amazon.
Now that would be a serious deal!
There are few other possibilities of that scale. But it’s easy to think of other major deals that could materialize as the AI industry begins to mature. Databricks, for example, has been a major acquirer of other AI companies and is widely seen as a 2026 IPO candidate, with a market cap well over $100 billion. It could be an M&A target too.
Anysphere, maker of the smash-hit coding app Cursor, was valued at about $30 billion in its latest funding round. Perplexity, the AI search engine, was most recently valued at $20 billion, and is considered a prime buyout target due to its early success in building a consumer customer base. Design firm Canva is now worth more than $40 billion and looks well-positioned as AI remakes an industry long dominated by Adobe.
Everything of course depends on market conditions — and politics. If rising share prices throw the IPO window wide open, companies like Anthropic or Canva and their backers will likely prefer to give the public markets a go. Stagnant or modestly declining share prices might thus encourage M&A, though a full-on bursting of the bubble could limit buyers’ appetite and drag prices way down.
Trump’s willingness to allow mega-mergers that wouldn’t have been attempted under his predecessor is also not a sure thing. The President’s loyalties are nothing if not instrumental, and political blowback could yet lead him to throw Big Tech under the bus.
That said, we’re betting it will be a big year for big deals, one way or another. Keep reading below for more details on 2025 M&A and how it compares to prior years.
Three Big Charts
M&A for VC-backed Startups Rebounded in 2025
Much to the relief of Silicon Valley investors, VC-backed startup acquisitions picked up substantially in 2025. This year has seen the highest deal value for venture-backed startup M&A since 2021 at $174.5 billion, though the total number of deals dropped from last year.
The total value of tech deals, not just VC-backed startups, reached $543 billion this year, their highest point since 2021, per The Information.