The Impact of AI on Software Mergers and Acquisitions in 2026

As 2026 unfolds, cloud software stocks are experiencing a significant downturn, continuing a trend from the previous year. The WisdomTree Cloud Computing Fund has seen a decline of over 8% since the start of the year, while major players like Salesforce, ServiceNow, and Adobe have dropped more than 14%. This decline is largely attributed to concerns that artificial intelligence (AI) will disrupt traditional software roles, as enterprises increasingly turn to AI solutions for tasks previously managed by software vendors. The launch of Anthropic's AI agent tool, Claude's Cowork, has intensified these fears, prompting speculation about a wave of mergers and acquisitions (M&A) in the software sector.

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In response to the shifting landscape, Salesforce CEO Marc Benioff has been actively defending his company's position, asserting that Salesforce is well-prepared for the AI transition. He described the company's latest quarter as "the best quarter we've ever had in our careers," yet acknowledged that market perceptions are challenging, stating, "if you don't produce a large language model you're evidently not in fashion right now." Similarly, ServiceNow has announced a partnership with OpenAI to integrate AI agents into its offerings, although this has not alleviated investor concerns, as the company's shares have fallen 17% in January alone.

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Analysts predict that the current market conditions may compel several mid-sized software companies to explore strategic alternatives, including potential acquisitions. Rishi Jaluria from RBC Capital Markets has identified companies such as Asana, Box, and DocuSign as likely acquisition targets due to their vulnerability in the current market. The upcoming tech earnings season is expected to provide further insights into how companies are adapting to AI and the potential for consolidation in the industry.

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The role of AI in M&A is evolving, with regulators increasingly scrutinizing deals based on future market potential rather than current metrics. Concerns about "killer acquisitions," where larger firms acquire smaller, innovative companies to stifle competition, are becoming more prevalent. Additionally, the focus on data control and compliance with AI regulations is reshaping how companies approach acquisitions, as buyers weigh the risks and opportunities presented by AI technologies.

AI Is Changing M&A as Regulators Target ‘Killer Acquisitions’ and Data ControlCNBC

The intersection of AI and software M&A is poised for significant transformation in 2026. As companies adapt to the rapid evolution of AI technologies, the landscape for acquisitions will likely shift, with a focus on integrating AI capabilities into existing business models. The coming months will be critical in determining how software firms navigate these challenges and capitalize on emerging opportunities in an increasingly AI-centric market.

AI Is Changing M&A as Regulators Target ‘Killer Acquisitions’ and Data Control

• “We're seeing just incredible buying opportunities right now,” — Orlando Bravo, Co-founder of Thoma Bravo

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• “Co-founder and chief executive Matt Fox said: "2025 was a transformative year for the Snaptrip Group.” — Matt Fox, Co-founder and CEO of Snaptrip Group

AI-powered accommodation firm Snaptrip expands with two acquisitions

• “Regulatory scrutiny is another key factor – around the world, regulators are not just looking at current market size/turnover but also the future potential market size.” — Herbert Smith Freehills

AI Is Changing M&A as Regulators Target ‘Killer Acquisitions’ and Data Control

While some analysts express optimism about the potential for acquisitions in the software sector, others highlight significant vulnerabilities among companies not tied to established enterprise systems. The extent to which AI will disrupt various software companies remains uncertain, with differing opinions on the timeline for this transformation.

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