AI’s M&A wave set to surge with Apple, IBM eyeing acquisitions

The artificial intelligence gold rush is driving a new wave of corporate dealmaking, with technology giants and private equity firms positioning themselves for what one prominent analyst calls an imminent M&A “floodgates” opening. This surge in acquisition activity reflects both the fierce competition for AI capabilities and a more favorable regulatory environment that’s making large-scale tech deals easier to complete.

Dan Ives, a technology analyst at Wedbush Securities, a prominent investment research firm, recently identified several publicly traded companies as prime acquisition targets in this evolving landscape. His analysis comes as major technology firms scramble to build comprehensive AI portfolios through strategic purchases rather than solely relying on internal development.

The regulatory shift enabling deal activity

The current M&A momentum stems largely from a more permissive regulatory approach toward technology acquisitions. “With the regulatory landscape becoming more lenient to acquisitions with the new administrations stepping in and no longer representing steep hurdles, we believe that the tech M&A floodgates are ready to be opened,” Ives explained in a recent note to clients.

This regulatory shift matters because previous years saw increased scrutiny of big tech acquisitions, with regulators blocking or challenging deals they viewed as potentially anti-competitive. The more accommodating stance creates opportunities for companies to pursue “accretive assets”—acquisitions that immediately add value to the buyer’s existing operations and capabilities.

Recent deal activity signals broader trend

Several high-profile transactions have already demonstrated this trend. Core Scientific, a cryptocurrency mining company, agreed to sell its data center business to CoreWeave, an AI cloud computing provider, in a $9 billion all-stock deal in July. This transaction highlights how companies with valuable computing infrastructure are becoming attractive to AI-focused buyers.

Similarly, Palo Alto Networks, a cybersecurity giant, announced plans to acquire Israeli security firm CyberArk in a deal valued at approximately $25 billion. Meanwhile, enterprise software company NiCE unveiled plans to purchase Cognigy, a consumer-focused generative AI company, for nearly $1 billion. These deals illustrate how established technology companies are using acquisitions to rapidly expand their AI capabilities across different market segments.

Why Apple and IBM are expected to be aggressive buyers

Ives specifically identified Apple and IBM as companies likely to pursue aggressive acquisition strategies during this cycle. Both technology giants find themselves in catch-up positions within the AI landscape, making strategic purchases particularly attractive for accelerating their capabilities.

Apple, despite its massive resources and technical expertise, has been relatively slower to integrate generative AI features into its consumer products compared to competitors like Google and Microsoft. Strategic acquisitions could help the company rapidly acquire specialized AI talent and technologies to enhance Siri, improve device functionality, and compete more effectively in AI-powered applications.

IBM, meanwhile, has been working to reinvent itself as an AI and cloud computing leader after years of declining traditional business segments. The company has made AI a central focus through its Watson platform and consulting services, but faces intense competition from cloud giants like Amazon, Microsoft, and Google. Targeted acquisitions could help IBM strengthen specific AI capabilities and expand its enterprise AI offerings.

Prime acquisition targets and their appeal

Ives highlighted several publicly traded companies as attractive takeover candidates, each offering distinct strategic value:

C3.AI represents a pure-play enterprise AI software company that helps large organizations implement AI solutions across their operations. Despite the company’s stock declining 49% year-to-date, its comprehensive AI platform and enterprise customer relationships make it valuable to buyers seeking ready-made AI capabilities.

SanDisk, the data storage company, has seen its shares surge over 200% since beginning trading under the SNDK ticker in February. The company’s storage technologies are crucial for AI applications that require massive data processing and storage capabilities.

Tenable Holdings specializes in cybersecurity vulnerability management, an increasingly important area as AI systems create new security challenges. Although its stock has declined 26% this year, the company’s expertise in identifying and managing security risks makes it attractive to buyers building comprehensive AI security solutions.

Qualys offers cloud-based security and compliance solutions that complement AI infrastructure needs. Despite a 6% stock decline this year, the company’s automated security platforms align well with the security requirements of AI deployments.

Lyft presents an interesting case as a mobility platform with significant data assets and AI applications in ride-matching and autonomous vehicle development. The company’s 68% stock gain this year reflects growing investor recognition of its AI-related value.

TripAdvisor, up 4% year-to-date, possesses valuable travel and hospitality data that could enhance AI-powered travel planning and recommendation systems.

The consolidation imperative

This acquisition activity reflects a broader industry dynamic where specialized AI capabilities are being absorbed into larger technology ecosystems. “While plenty of funding is expected to build AI use cases, we anticipate significant consolidation within the space over the next 5-10 years,” Ives noted. “More niche use cases for AI will be picked up and added to growing AI product portfolios from large-scale tech players.”

This consolidation trend makes strategic sense for several reasons. First, developing comprehensive AI capabilities internally requires enormous investments in talent, infrastructure, and research that can take years to yield results. Acquisitions provide immediate access to proven technologies and experienced teams.

Second, the AI market is evolving rapidly, with new applications and use cases emerging across industries. Companies that can quickly assemble diverse AI capabilities through acquisitions position themselves to serve multiple market segments and capture more value from the AI transformation.

Looking ahead

The combination of regulatory accommodation, intense competitive pressure, and abundant capital is creating ideal conditions for a sustained M&A wave in AI-related technologies. Companies that have built valuable AI capabilities, data assets, or complementary technologies are likely to find themselves attractive to strategic buyers and financial sponsors seeking to capitalize on artificial intelligence’s expanding role across industries.

For investors and industry observers, this trend suggests that the AI market’s structure will continue evolving through consolidation rather than purely organic competition. The companies that emerge as winners will likely be those that most effectively combine internal innovation with strategic acquisitions to build comprehensive AI capabilities.