The great dealmaking machine downshifted in the third quarter — but thanks to a handful of giant artificial-intelligence transactions, 2026 is still on track to be the second-biggest year for mergers and acquisitions ever recorded.
Fragile sentiment around AI valuations and higher borrowing costs dampened activity in the quarter, according to deal data reported this week. The slowdown was visible across boardrooms: bankers who spent two years riding an AI-fueled frenzy of data-centre, chip and software deals found clients suddenly more cautious about paying peak prices for assets whose earnings forecasts keep moving.
Yet the year’s totals tell a different story. A series of mega-deals struck earlier in 2026 was large enough that, even with a quieter third quarter, full-year global M&A volume remains on pace to trail only the all-time record. The pattern mirrors the stock market itself: narrow leadership, enormous headline numbers, and growing unease about how much of the boom rests on a single technology narrative.
Thursday’s trading offered a miniature of the mood. AI-related stocks sold off hard after a major AI company’s revenue update came in below earlier expectations, while the Dow Jones Industrial Average still managed a gain on the strength of energy and defensive shares. Dealmakers call that rotation risk: capital has not left the market, but it is demanding more proof.
What would reopen the floodgates, bankers say, is clarity — on interest rates, on energy prices, and above all on whether AI’s biggest customers keep spending at the current pace. Until then, the mega-deals will keep the annual statistics glowing while the middle of the market waits.
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