By Craig Muir, Partner and Head of Software, Data & Analytics
From tariffs and geopolitical uncertainty to high interest rates, the first nine months of 2025 were marked by prolonged volatility. However, the tide is turning as we head into the fourth quarter, with pitch activity and the quality of assets improving significantly, setting 2026 up for a robust year of deal activity.
What are expectations leading into the holidays? Investors are becoming more comfortable with the macroeconomic and M&A environment, either concluding that the volatility we experienced earlier in 2025 is now in the rearview mirror or accepting that continued volatility is the new normal. Though there are a few clouds on the horizon—for now, the economy is robust, equity markets are at record highs, and financing markets are strong. Consequently, dealmakers are gearing up for a significant uptick in activity.
With pent-up demand from buyers, and private equity coming under significant pressure to return capital to their Limited Partners, we expect to see a favorable backdrop for M&A for the foreseeable future, with a continuing focus on high-quality assets where prices are likely to remain elevated.
From a Technology sector standpoint, Artificial Intelligence, specifically generative AI, continues to dominate the dealmaking and corporate landscape, creating a significant opportunity for companies with large amounts of proprietary information to commercialize their troves of data.
Specialized AI models are becoming more prevalent as users increasingly seek use-case-specific models to help drive their workflows or look to build agentic AI solutions. Those models are being powered by highly curated and specialized data sets that are increasingly being knitted together with internal proprietary data to drive efficiency and adoption. This is where businesses are finding value and an edge—in data that is being used to train or power AI models. As far as AI is concerned, those who control the data own the proverbial keys to the kingdom.
So, what does this all mean for data companies? The insatiable hunger for data is creating opportunities for small and large companies alike. The consolidators are aggressively looking to expand their capabilities by acquiring leading data companies that can help to accelerate their growth, enhance their own AI solutions, and consolidate their market positions. Niche data providers are increasingly building highly valuable data sets that customers are willing to pay for, and so the cycle continues.
Build or buy? Buy or partner? These are questions businesses will need to answer for themselves based on their size and scope. Either way, the race is on. Companies of all sizes are desperate for data, talent, and capabilities that will fuel the coming agentic AI revolution.
In his 2011 Wall Street Journal article, Marc Andreessen famously said: “Software is eating the world.” Fourteen years later, Solomon says: “Data is powering AI.”
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