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Unglamorous World of Data Infrastructure Drives Surge in AI-Focused Tech M&A

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Despite a slowdown in global dealmaking due to tariffs and geopolitical uncertainty, the data infrastructure sector is booming as legacy tech giants scramble to secure their positions in the AI race. Companies that handle the vast volumes of data required to train advanced AI models have become key acquisition targets for firms like Meta, Salesforce, and ServiceNow, eager to compete with leaders such as OpenAI, Google, and Anthropic.

“AI without data is like life without oxygen, it doesn’t exist,” said Brian Marshall, global co-head of software investment banking at Citi, highlighting how data management has taken center stage in the tech industry’s current moment.

Technology deals have been one of the few bright spots in a subdued M&A market, accounting for $421 billion out of the $1.67 trillion in global deals announced in the first five months of 2025—roughly 25% of total M&A volume. This marks a steady rise from 20% in 2024 and 17% in 2023. Notably, nearly 75% of the value of tech deals involves AI software makers.

Goldman Sachs Managing Director Matthew Lucas described enterprise data as the “most dynamic area in software M&A right now,” emphasizing that speed and being first to market are critical, driving companies to acquire rather than build their own capabilities.

Investment bankers identify companies like Confluent, Collibra, Sigma Computing, Matillion, Dataiku, Fivetran, Boomi, and Qlik as likely acquisition targets. These firms specialize in integrating, analyzing, and managing data on cloud platforms—capabilities essential for effective AI deployment.

Executives from Boomi, Dataiku, Fivetran, and Qlik expressed no surprise at the increased attention. Dataiku CEO Florian Douetteau noted that “messy, siloed data” has long limited analytics potential, but the urgency of AI has made resolving these issues existential for businesses.

Recent multibillion-dollar acquisitions illustrate this trend. Meta’s $14.8 billion deal for a 49% stake in data-labeling company Scale AI, Salesforce’s $8 billion plan to buy data integration firm Informatica, and ServiceNow’s acquisition of data catalog platform Data.world exemplify how legacy tech companies are investing heavily to own the data pipeline critical for AI.

Globally, generative AI spending is forecast to hit $644 billion in 2025, a 76.4% increase from 2024, underscoring the scale and pace of AI investment.

IBM also recently closed its acquisition of data management company DataStax, aiming to improve handling of unstructured data for its AI platform.

However, dealmakers caution that acquiring data infrastructure alone does not guarantee AI success. Proper organization and filtering of data are essential to avoid errors, as seen when Air Canada faced legal issues over bad AI chatbot advice due to poor data input.

“A lot of companies have a huge amount of data, but they’re learning that you can’t just funnel every piece of data you have into an AI engine without organization and expect correct results,” said Brian Mangino, partner at Latham & Watkins.

The rapid pace of acquisitions and the high stakes in AI competition highlight how data infrastructure—though less glamorous than AI algorithms themselves—is becoming the backbone of future tech innovation.

AI to Fuel Record Year for M&A in U.S. Power Sector

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Dealmakers anticipate that 2025 will be a record year for mergers and acquisitions (M&A) in the U.S. power sector, driven by the surging demand for electricity to support artificial intelligence (AI). This growing appetite for power generation and infrastructure assets is fueled by the massive energy needs of data centers that power AI technologies.

According to sources in the industry and at the CERAWeek energy conference in Houston, the first two months of 2025 have already seen significant deal-making activity, with 27 power deals valued at $36.4 billion. A standout transaction was Constellation Energy’s acquisition of Calpine for $16.4 billion. This surge in deal volume contrasts sharply with the broader M&A market, which has experienced its weakest start since the global financial crisis.

Power sector deal flow is expected to increase as companies race to meet growing electricity consumption. Private equity firms and institutional investors, such as KKR and PSP Investments, are actively pursuing investments, with KKR and PSP’s $2.8 billion acquisition of a 20% stake in American Electric Power’s (AEP) transmission network as one of the major recent deals. Strong electricity price increases have boosted the shares of power companies, enabling larger transactions.

The influx of capital into energy investments is substantial, with $334 billion in dry powder (capital raised but not yet deployed) by the end of 2024. Much of this capital is earmarked for investments in power generation, infrastructure technologies, and renewable energy projects. These funds are also fueling the increasing trend of taking public power companies private, as seen in the $2.2 billion sale of Altus Power to TPG’s climate investment arm.

The demand for power infrastructure has also driven utilities to divest non-core business units. In early 2025, Eversource Energy agreed to sell its Aquarion Water unit for $2.4 billion, while National Grid announced the sale of its U.S. renewables business to Brookfield Asset Management.

Despite challenges, such as rising costs for essential components like steel, aluminum, and copper, and uncertainties around tax credits for renewable projects, the deal-making momentum in the power sector is expected to continue. Market volatility, including potential impacts from Trump administration policies and immigration reform, will likely make existing power assets even more valuable, spurring more deals.