The technology sector’s merger and acquisition landscape faces renewed challenges as geopolitical tensions disrupt earlier signs of recovery. While 2025 began with optimism fueled by major deals in artificial intelligence, cybersecurity, and proptech, recent trade policy shifts have cast doubt on sustained momentum.
Notable Q1 Transactions
- CoreWeave’s $1.7B acquisition of AI developer platform Weights & Biases
- ServiceNow’s $2.9B purchase of AI automation specialist Moveworks
- Google’s landmark $32B deal for cybersecurity firm Wiz
- Brookfield’s $1B investment in proptech innovator Divvy Homes
- Munich Re’s $2.6B acquisition of digital insurer Next Insurance
Shifting Economic Winds
The April 2nd tariff announcement triggered immediate market reactions:
- Tech stocks lost $250B in market value within 24 hours
- Subsequent 90-day tariff pause created valuation uncertainty
- Public company acquirers face stock price pressures
- Private equity buyers reassess supply chain risks
“The outlook has shifted dramatically since March. What looked like a rebound now appears fragile as companies grapple with unpredictable trade policies,” noted Stellar Tucker of Truist Securities.
Market Dynamics in Flux
Three critical factors shaping current M&A activity:
- Valuation Volatility: Disparity between 2021 peaks and current market realities complicates pricing
- Strategic Hesitation: Corporate buyers delay acquisitions amid economic uncertainty
- Alternative Capital Use: Public firms prioritize stock buybacks over acquisitions
Silver Linings in the Storm
While overall activity slows, specific segments show resilience:
- Distressed acquisitions of underfunded startups
- AI consolidation led by cash-rich players like OpenAI
- Cross-border deals in tariff-exempt sectors
- Special purpose acquisition vehicles targeting niche technologies
