AI DRIVES M&A TO RECORD HIGHS

The M&A surge reflects three converging forces: intense competition for AI assets, ample investment capital, and regulators taking a lighter touch on deals. Tech companies and strategic buyers are competing aggressively for AI-focused startups and talent. Yet significant headwinds persist. Private equity firms remain largely sidelined because sellers are demanding valuations that don't align with traditional return expectations. According to Jones Day partner Robert Profusek, the gap between buyer and seller expectations continues to widen. More concerning are the valuations themselves. AI companies are commanding multiples at levels never seen before, raising questions about whether prices reflect genuine value or speculative fervor. If these valuations prove unsustainable, the current M&A frenzy could contract sharply. The market faces a critical test: whether AI investments will generate returns justifying current prices, or whether today's deal boom represents a bubble waiting to deflate.