AI Leads Record Deal Flow While Energy Reality Looms

Artificial intelligence companies were top of the list in mergers and acquisitions—including fundraisers—over the first quarter of the year as activity in the field remained unbothered by the war in the Middle East and the energy crunch it caused.
The first-quarter M&A deal data, as reported by Reuters, suggests that investors are not following short-term developments linked to the war but are taking a longer-term view and a new resilience to shocks.
“We have seen a series of market disruptions over the last couple of years and market participants have learned to deal with these shocks,” the head of mergers and acquisitions for EMEA at UBS, Philipp Beck, told Reuters. The executive also noted that “Deals are driven by strategic rationale, which is stronger than short-term volatility in the market.”
The strategic rationale that Beck talks about appears focused on artificial intelligence. Of all the M&A deals closed during the first half, 22 worth over $10 billion were in the AI space—a record number. Three of these deals were part of OpenAI’s latest funding round that saw $110 billion poured into the company. Another $30 billion was raised by Anthropic and also made the top ten of the biggest dels for the first quarter of 2026.
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Strictly speaking, none of the abovementioned transactions were mergers or acquisitions, and Reuters admits that. These were equity stake sales as the leaders in AI sought more financing with a view to turning a profit on the technology that the Big Tech industry is promising to dominate the future.
Interestingly, AI dominated the transaction landscape despite the growing potential for disruption in the AI space, resulting from the energy crunch caused by the hostilities in the Middle East. The war has not only disrupted oil and gas supply, which is already bad enough given the significant energy needs of AI, but also the supply chains of critical materials, including helium. Helium is used in the production of semiconductors, among other things.
It is possible that the impact of the disruptions would only manifest itself in the current quarter or later in the year when the physical shortages begin to emerge—unless, of course, the war ends soon, which remains an uncertain prospect, after Donald Trump said in a speech Wednesday there were still goals to accomplish with the Iran offensive.
According to the LSEG data cited by Reuters, AI fundraising deals through equity purchases represented 29% of all merger and acquisition activity over the first quarter of the year. Reuters pointed out that this was a growing portion of the M&A total. However, this may change if the fallout from the Middle Eastern war expands and extends in time.
Even now, some analysts are warning that the return to normal operation of the global economy would take months after the end of the hostilities between the U.S. and Israel, on one side, and Iran on the other. With Middle Eastern oil producers having slashed well over 10 million barrels of oil in daily production, and with gas production also seriously disturbed, the inflation outlook has certainly changed, and not in an optimistic direction. In fact, the only question now seems to be just how bad inflation would get and how soon central banks would need to start hiking interest rates.
This could have an adverse effect on M&A activity in later quarters, although it is safe to say that interest in exposure to the AI industry would remain strong. AI is all the rage now, and it seems investors do not concern themselves overmuch with issues such as energy supply security or, indeed, the availability of gas turbines for power generators. It would take more than a few weeks for this sentiment to change, and then only potentially.
By Irina Slav for Oilprice.com
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