“When you look around and you see your peers doing these big deals and taking advantage of the tailwinds, you don’t want to be left out,” said Maggie Flores, partner at law firm Kirkland & Ellis LLP in New York. “The regulatory environment is in a position that is very conducive to dealmaking and people are taking advantage of it.”
The tally also shows a level of exuberance in certain pockets that some advisers and analysts worry is unsustainable. Global trade tensions are ongoing, and market observers are increasingly warning of a selloff in the white-hot equity markets that have underpinned the M&A resurgence.
“These equity returns are really coming out of AI, and AI spend is not sustainable,” said Charlie Dupree, global chair of investment banking at JPMorgan. “If that pulls back, then you are going to see a broader market that isn’t really advancing.”
“Everyone needs to be an AI banker now,” said Wally Cheng, head of global technology M&A at Morgan Stanley. “Just as software began eating the world 15 years ago, AI is now eating software. You have to be conversant in AI and understand how it will affect every company.”
“They’re thinking ‘I’m better off just operating my business and getting there.’ It has to be an explosive offer for them to come to the table,” he said.
“That has not been the case,” he said. “Unless fear creeps back into the market, there doesn’t seem to be anything in the near term that’s going to change the dynamic here.”
