Bold moves define a volatile year
2025 marked a decisive turning point for the TMT sector. AI investment didn’t just dominate the narrative; it propped up the economy itself, accounting for as much as half of US GDP growth in early 2025. And, although valuations in some equity segments appeared stretched, the underlying buildout of semiconductors, data centers, and cloud infrastructure signaled a cycle grounded in real assets and long horizon demand. Against this backdrop, TMT companies recalibrated strategies to navigate persistent tariff pressure, evolving regulatory signals, and shifting consumer expectations, setting the stage for more focused and capital-disciplined mergers and acquisitions (M&A) out of semiconductors, data centers, and cloud infrastructure signaled a cycle grounded in real assets and long‑horizon demand. Against this backdrop, TMT companies recalibrated strategies to navigate persistent tariff pressure, evolving regulatory signals, and shifting consumer expectations, setting the stage for a more focused and capital‑disciplined deal environment.
After a challenging first quarter (Q1’25) shaped by trade policy shifts and geopolitical volatility, capital markets regained their footing. By midyear, dealmakers no longer chased every AI-adjacent asset but instead hunted for scale and strategic control. The focus sharpened around AI-native platforms, cybersecurity hardening, semiconductor design, and massive datacenter buildouts. Even as overall deal counts stayed soft, deregulation quietly opened the door for larger, more complex deals to clear, fueling a wave of consolidation among technology operators, media giants, and telecom infrastructure owners‑adjacent asset‑native ‑center build‑outs. Even as overall deal counts stayed soft, deregulation quietly opened the door for larger, more complex deals to clear, fueling a wave of consolidation among technology operators, media giants, and telecom infrastructure owners.
Q3’25 delivered fewer transactions but far bigger checks, punctuated by several record‑setting take‑privates and aggressive consolidation. Q4’25 turned into a value‑driven sprint as capital concentrated in megadeals tied directly to AI compute capacity and data rich‑rich platforms, as tech buyers sought assets resilient to tariffs, labor constraints, and geopolitical shocks. Media added its own gravitational pull, with a blockbuster M&A moment, streaming consolidation, and the monetization of premium sports assets reshaping the competitive landscape. Telecom, meanwhile, surged on the back of AI infrastructure, with fiber, spectrum, and next‑gen network investments to meet latency and bandwidth demands.
By yearend, TMT had generated its strongest value quarter since 2022. Despite continued geopolitical uncertainty, tariff policy shifts, and a labor market showing signs of strain, the sector exited 2025 with momentum and entered 2026 positioned for disciplined but decisive growth. 1 2 3 4 5
