Artificial Intelligence and Strategic M&A in 2026
Capital Allocation, Valuation, and Market Structure — Evidence from 2022 to 2025 Transaction Data
Abstract
This working paper examines the influence of AI classification on valuation multiples in the technology M&A market from 2022 to 2025. The study is motivated by two simultaneous market forces: a broad-based rebound in global M&A activity following a prolonged contraction, and an unprecedented surge in AI-related capital formation.
We construct an illustrative dataset of 80 to 150 transactions from publicly available sources, including SEC filings, press releases, and market data from S&P, Capital IQ, and PitchBook. Transactions are segmented into three categories: AI-native companies, AI-enabled incumbents, and non-AI SaaS controls.
The methodology employs descriptive statistics, a comparative analysis of median and mean valuation multiples (EV/Revenue and EV/EBITDA), and an OLS regression to model the effects of revenue growth rate, EBITDA margin, and AI classification on EV/Revenue multiples.
The regression is specified as:
EV/Revenue = β0 + β1(Growth) + β2(EBITDA Margin) + β3(AI Classification) + ε
Results indicate that AI classification is a statistically significant predictor of EV/Revenue multiples after controlling for growth and profitability. AI-native companies command a material premium over non-AI SaaS peers. The premium is not explained by profitability alone — AI classification is an independent and statistically significant variable.
Key Findings
- Incumbent Re-rating Is Underway: AI-enabled incumbents — established software businesses that have integrated AI into existing products — are being valued on a forward-trajectory basis. Acquirers are pricing in anticipated margin expansion and competitive moat reinforcement, not just current financials.
- Non-AI SaaS Faces Structural Multiple Compression: As capital concentrates in AI-classified assets, non-AI SaaS businesses face a bifurcated market. The multiple gap between AI-native and non-AI SaaS has widened consistently from 2022 to 2025 and shows no sign of reversal.
- The Rebound Is AI-Driven: The 2024 to 2025 M&A rebound is not uniform. Deal volume and premium pricing are concentrated in AI-adjacent transactions. Non-AI SaaS deal flow has recovered more slowly, with buyers applying greater scrutiny to growth sustainability and competitive positioning.
Download the Full Working Paper
The complete 23-page working paper is available for download as a PDF. It includes the full methodology, dataset construction notes, regression outputs, and sector-specific analysis.
Download PDFAbout the Author
Joash Boyton is the Founder and Managing Director of Acquiry. He advises on buy-side and sell-side digital M&A mandates ranging from USD $1M to $500M across SaaS, fintech, payments, gaming, digital media, and blockchain. He operates across the US, UK, UAE, Singapore, and Australian markets.
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