The Trump administration passed its 50-day mark this week, and any prior hope of a post-inauguration dealmaking boom now just looks like wishful thinking.
Strategic M&A has gotten off to an excruciatingly slow start: US M&A volumes in January were the lowest they’ve been in 10 years, and February wasn’t rosy either.
Corporates are handcuffed by antitrust policing, price mismatches and market turmoil. And the new leadership at the FTC and Department of Justice is much more critical of Big Tech market consolidation than some Silicon Valley power players might’ve expected.
The Ferguson-Slater era
This week, Gail Slater, a longtime crusader against the tech industry’s consolidation of power, was confirmed by the Senate to head up the DOJ’s antitrust office. Andrew Ferguson, Lina Khan’s replacement as FTC chair, has also spoken critically of Big Tech’s unyielding influence.
“There has not been the sea change that some people are clamoring for,” said Matt Adler, partner at Baker Botts in its antitrust and competition law practice.
New regulatory chiefs are already signaling that Big Tech won’t get a free pass. The FTC is moving ahead with a sprawling antitrust probe into Microsoft‘s licensing, AI and data center operations, Bloomberg reported.
When the cats are away
Without Big Tech companies at their usual seats around the M&A table, dealmaking volume has been muted.
The proportion of deals in which top publicly traded tech companies participated as buyers has continued to drop. Microsoft, for one, hasn’t made a single acquisition in the last 18 months, not counting its unusual deal for Inflection AI’s talent and tech licenses that has (so far) skirted regulator scrutiny.
Much of the cash that would’ve normally been earmarked for M&A is instead flooding into Big Tech’s AI infrastructure buildouts.
“We just never see the majors at the table anymore,” said Victor Basta, managing partner at Artis Partners, a tech investment bank focused on sell-side M&A.
“Clients of ours have stopped saying ‘I want to be acquired by Google,’ because Google’s just not showing up,” said Basta.
Instead, a growing proportion of startups are selling to other venture-backed companies. DataBricks, for example, has made 11 acquisitions since 2022, according to a PitchBook analyst note.
In 2024, US M&A totaled $88 billion in exit value. Just $3.3 billion, or less than 4%, were acquisitions by the 25 most valuable tech-focused public companies by market cap.
“M&A is second priority for the majors, after building out their AI infrastructure,” Basta said.
The market sell-off isn’t improving the M&A outlook either: Since the inauguration, the tech-heavy Nasdaq has shaved off over 2,000 points. With stock prices falling, these companies won’t prioritize investing in M&A.
“The share price makes a big difference on whether [public companies] are willing to transact,” said Bradley Weber, co-chair of Goodwin’s capital markets practice. The market sell-off “has thrown a giant wrench in plans,” he added.
Even for the most patient LP capital, 2025 is looking dicey. Coreweave and Hinge Health have both taken their first public IPO steps, but many companies are still sitting on their hands.
Secondaries have boomed in the past few years, but they still don’t make up for the dearth of IPOs.
“The share of venture growth was about 9% of the total secondaries market, roughly $15 billion or so,” said Bernhard Engelien, co-head of secondaries at Greenhill & Co.
“That’s a big number, but it’s probably not enough to create significant liquidity to make LPs happy.”
Featured image by Jenna O’Malley/PitchBook News
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