Global M&A stays strong in 2026 despite tightest capital squeeze in 30 years

The 2025 global mergers and acquisitions boom has spilled over into 2026, with companies reevaluating their portfolios and the demand for large-scale transactions being driven by artificial intelligence. However, the capital pool is tightening, requiring executives to be more discerning in their decision-making.

Last year saw a 40% surge in deal-making activity, reaching a record $4.9 trillion, as central banks lowered interest rates, valuations improved, and companies ramped up spending on AI. This trend is expected to continue as Wall Street shows renewed interest in big deals, buoyed by the prospect of lower borrowing costs.

According to a Bain & Company survey, 80% of M&A executives anticipate either sustaining or increasing deal activity in 2026, citing improved macroeconomic conditions and a backlog of private equity and venture capital assets awaiting exit.

Goldman Sachs led the global M&A rankings in 2025, advising on nearly 40 deals worth $1.48 trillion. Despite this, companies are proceeding cautiously, with Boston Consulting Group’s M&A sentiment index showing a rebound but still below the long-term average, reflecting a cautious stance.

The funding squeeze is the tightest in decades, with the capital allocated to M&A hitting a 30-year low in 2025. This has pushed private capital to the forefront of dealmaking, with private equity firms, private credit funds, and sovereign wealth funds playing significant roles.

AI-related demand is driving blockbuster deals, with mega-deals exceeding $5 billion accounting for a significant portion of the increase in deal value. However, heavy capital spending in AI could constrain M&A activity in the near term, as companies redirect investments towards data centers, energy, and infrastructure.

Overall, the M&A landscape in 2026 is characterized by a mix of optimism and caution, with companies focusing on strategic growth, portfolio reassessment, and the impact of AI on dealmaking. The continued evolution of the global economy and advancements in technology will shape the M&A landscape in the years to come.