Global deal-making activity surged significantly in the first half of 2024, fueled largely by investments in artificial intelligence (AI) and a favorable regulatory environment, according to industry data. Total deal value reached approximately $3.2 trillion through June, representing a 45 percent increase from the same period last year, marking the highest half-year total in at least a decade.

This wave of deal-making has been dominated by large-scale transactions, with 44 deals exceeding $10 billion announced during this period. These blockbuster deals have elevated the overall value despite a slight decline of about 1 percent in the total number of transactions compared to last year. Many large companies appear to be seizing what they see as a limited window to pursue transformative mergers and acquisitions amid geopolitical uncertainties such as the ongoing war in the Middle East and international trade tensions.

Executives and banking experts describe this current surge as distinct from previous booms linked to low interest rates or speculative bubbles, emphasizing that companies are pursuing size and scale to remain competitive in a rapidly evolving economy dominated by a handful of tech giants. For example, entering the S&P 500 now requires companies to be roughly twice the size they did five years ago, prompting corporations to undertake larger and more strategic deals.

Notable transactions include NextEra Energy’s $118 billion acquisition of Dominion Energy, aimed at expanding its capacity to meet growing electricity demands driven by AI technologies. Meanwhile, SpaceX completed a $60 billion purchase of Cursor, a startup specializing in AI-assisted software development, to support its AI initiatives.

Despite the prevailing uncertainty—ranging from supply chain challenges affecting chip production to fluctuating oil markets—deal-makers continue to move forward. Industry observers highlight the paradox of a boom occurring amid high market volatility and geopolitical disruptions. Some market participants, particularly private equity firms, have been more cautious. Private equity’s share of total deal value has fallen from about 34 percent to 24 percent this year, largely due to difficulties in selling software companies whose valuations have been thrown into question by rapid AI-related market shifts.

Initial public offerings (IPOs) have also reflected the AI-driven investment trend. Larger companies focused on AI and defense technology have dominated the IPO market in the first half of the year. For instance, Cerebras, a Silicon Valley AI chip maker, raised $5.55 billion, while Madison Air Solutions, a data center cooling provider, secured $2.23 billion. SpaceX’s IPO, valued at over $75 billion, set a record for largest U.S. offering; however, its stock has experienced volatility since trading began, declining from its initial surge but remaining above its offering price.

While about a third of companies that went public in the second quarter have seen their share prices dip below their IPO levels, analysts note this is consistent with historical IPO performance patterns where heightened initial enthusiasm often stabilizes or wanes in early trading months.

Looking forward, uncertainty persists around whether AI-driven investments will generate anticipated returns amid broader economic challenges such as inflation and geopolitical risks. Nonetheless, many industry experts anticipate that AI will remain a central theme driving deal-making activity through the remainder of the year.