A new PwC report published Tuesday shows that while tech, media, and telecom M&A volumes are falling, artificial intelligence is fueling a surge in high-value transactions. Strategy, not scale, is now driving the dealmaking.
By Lou Sokolovskiy
In the past, the technology sector thrived on velocity—more users, more funding, more deals. But a new PwC report suggests a different kind of energy is now at work: intelligence over intensity.
According to PwC’s latest “Telecommunications, Media & Technology (TMT) M&A Outlook,” global deal volumes fell by 11% across the TMT landscape in early 2025. Yet deal values rose 20%, signaling a profound shift in what buyers are chasing—and why.
At the heart of this recalibration? Artificial intelligence.
“The promise of AI to transform the global economy is driving over $1 billion of investment per day across R&D, capex, joint ventures, and acquisitions,” said Barry Jaber and Bart Spiegel, the report’s co-authors.
AI is no longer a buzzword—it’s become a financial driver and strategic mandate. PwC’s report highlights a decisive move toward “capability-driven” deals where acquirers are buying companies not just for revenue or users, but for data architectures, AI models, or engineering teams fluent in large language models.
Tech’s New Priority: Capability Over Customer Base
Nowhere is this more evident than in the technology sector, where deal values rose by 15%, even as deal volumes declined by 11%. That divergence reflects a growing emphasis on quality of capabilities over quantity of targets. Mega-deals are back—but they look different. Instead of acquiring to expand reach, companies are buying to leapfrog innovation cycles.
Some of the most notable examples include IBM’s acquisition of database firm DataStax, aimed at strengthening its AI-ready infrastructure, and MongoDB’s purchase of AI startup Voyage. Both happened earlier in February. These aren’t scale plays. They’re strategic infusions of specialized knowledge and platforms.
Media and Telecom Get Smarter
The story extends beyond tech. The media sector, long driven by content libraries and IP portfolios, is now seeing renewed M&A interest as firms seek to optimize recommendation engines and automate production workflows. Meanwhile, telecoms are investing in edge computing and 5G-native AI capabilities to support latency-sensitive applications like autonomous vehicles and real-time health monitoring.
Even in sectors where legacy infrastructure still dominates, deal logic is shifting: from fixed-line consolidation to digital transformation; from advertising revenue to algorithmic engagement.
A Quiet Reset Before the AI Storm
The broader message of the report is one of strategic patience. With macroeconomic uncertainty, tariff tensions, and interest rates still elevated, dealmakers are being highly selective. The result: fewer total transactions—but a premium placed on those that align with long-term AI roadmaps.
That restraint is intentional. PwC analysts suggest that while the volume of transactions may continue to underwhelm into late 2025, the deals that do happen will set the tone for a new era of industry reinvention.“If the current pace of dealmaking continues, total deal volume for 2025 may fall below 45,000—the lowest level in more than a decade,” read a broader PwC report, titled “2025 mid-year outlook Global M&A industry trends,” which also came out Tuesday. “At the same time, the rise in deal values signals a trend towards larger transactions.”
Outlook: The Rise of the Intelligent Acquirer
This evolution has implications well beyond Silicon Valley. Corporate boards across industries are now being asked whether they’re acquiring for size—or for smarts. And increasingly, the answer leans toward the latter.
Gone are the days of volume-for-volume’s-sake deal pipelines. Today’s winning playbook is tighter, faster, and smarter—less about who you own, and more about what they know.
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June 2025
