AI Startup M&A Deal Volume and Valuation Hit Records

AI startup M&A deals have hit record highs in both deal volume and valuation, according to data from Mergermarket.

Samuel Kerr, head of equity capital markets at Mergermarket, said in an interview with PYMNTS that this is a common trend after a period of maturity in which larger companies would go after smaller players to absorb their technologies rather than building their own.

“You’re going to start to have the big winners start to acquire other technologies rather than doing it in-house,” Kerr said. “That’s the natural progression.”

According to Mergermarket data shared with PYMNTS, the value of global M&A deals involving AI startups rose by 288% to $49.9 billion in 2024 compared to the prior year. The number of deals was up 53%, to 454. Compared to 2019, the number of deals has risen by 130% while the deal value has soared by 730%.

From Jan. 1 to July 2 this year, deal value stands at $55.3 billion — already larger than 2024 as a whole by 11%. Deal volume is now at 240, already more than half for the entirety of 2024.

Recent AI acquisitions in the U.S. include the following:

• Meta acquired 49% of Scale AI for $14.8 billion and hired its co-founder and CEO Alexandr Wang to lead its new superintelligence lab. Meta reportedly also approached startups founded by former OpenAI executives — SSI and Thinking Machines — but was rebuffed. Now, it’s reportedly after Play.ai.
• OpenAI acquired legendary Apple designer Jony Ive’s AI devices startup, io, for $6.4 billion. OpenAI also recently acquired AI coding startup Windsurf for $3 billion.
• Salesforce is acquiring AI-powered cloud data management provider Informatica for $8 billion, among its latest deals.
• Grammarly acquired Superhuman, an AI-native email app, and recently also bought productivity startup Coda. The value of both deals were not disclosed.
• Nvidia acquired AI startups CentML and Gretel thus far in 2025; deal terms were not disclosed. In 2024, the chipmaker acquired seven AI startups, including Run:ai for a reported $700 million.
• ServiceNow is acquiring data.world, an enterprise data catalog and governance platform. It just acquired Moveworks for $2.85 billion.

Read more: Private Equity Groups Hold $1 Trillion as Tariffs Hinder Dealmaking

Kerr also noted a shift in investor behavior more broadly. “Diversification of portfolios across the world probably is the biggest investment theme that we’ve seen since the start of the year,” he said.

For example, U.S. institutional investors are actively buying into under-owned European names as part of this shift, Kerr said. Rather than the “end of U.S. exceptionalism” as some have conjectured, he said they are diversifying away from popular stocks of which they own a lot.

“People are being a little bit more selective about their portfolios,” Kerr added. “Now, perhaps it’s a better time for active managers. Wouldn’t that be an interesting thing if we saw a little bit of a move away from … the streams of passive investing — into active management?”

Meanwhile, the IPO market remains bifurcated. “If you’re one of these very exciting AI growth businesses, yes, absolutely, it’s a good time to go to market,” Kerr said.

But those without an “exciting” equity story will find a less attractive sentiment. “We’re certainly not in a bull market like we were in 2021 where pretty much everything come to market,” Kerr said.

The equity market today is cautious but resilient.

“What, in general, has been remarkable has been the resilience of the market as a whole,” Kerr said. “If you had told me six months ago that Iran and Israel would be in open conflict with one another and the equity market would be fine, I wouldn’t have believed you.”

That’s because people have gotten used to market volatility.

“Since the pandemic, I think people have been far better at digesting very dramatic macroeconomic, geopolitical news flows and able to invest through it rather than letting it hinder their investment decision-making,” Kerr explained. “People are becoming quite focused — ‘Does this affect my investment return? If it doesn’t or I can’t immediately see it affecting my investment return, then I’m going to carry on investing.”

Kerr called this a “sea change” in the market today. Tariffs, on the other hand, are the opposite in that its impact hits the bottom line directly. So tariffs can spook the market.

Asked whether equities are in a bull market, Kerr instead called it a “bullish” market because people want to put money to work. “There isn’t a great willingness to take money out of the market,” he said. “On that front, we are in a bull market despite everything that’s going on.”

“The resilience of the market has been staggering,” Kerr observed, “and whether that continues is going to be the question.”

Read more: Goldman Sachs President John Waldron: Dealmaking Outlook Is Still ‘Quite Good’

Read more: The M&A Files: You Just Had an Acquisition — Now What?

Read more: Shein’s Derailed Listing Has UK Investors Looking at ‘Notable IPOs’

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