Tech M&A Had a Decent Year. The Big One is Yet to Come.
Deep Dives
Explore related topics with these Wikipedia articles, rewritten for enjoyable reading:
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WarnerMedia
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The article references AOL-Time Warner as 'the biggest tech merger ever' and 'a cautionary tale' - understanding why this $164 billion merger failed spectacularly provides essential context for evaluating modern tech megadeals
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United States antitrust law
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The article's central thesis hinges on changing antitrust enforcement under Trump enabling megadeals that were blocked under Biden - understanding the legal framework and history of antitrust in tech is crucial context
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Acquisition of Activision Blizzard by Microsoft
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Referenced as 'the second-biggest tech merger ever' at $75 billion, this recent deal faced intense regulatory scrutiny globally and serves as the template for how future megadeals will be evaluated
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
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