Introduction
The March 2026 case for a bigger TMT year rested on a strong base and an easing cycle. PwC's 2026 TMT outlook said 2025 global TMT deal value rose 49% to about $961 billion, and the expectation was that falling rates, AI demand and PE capital would push 2026 higher. The value arrived; the breadth did not. Global TMT deal value rose 48% to $472 billion in the first five months of 2026 while volumes fell 9%, and technology took 89% of the value and 15 of the 16 megadeals, according to PwC's 2026 mid-year TMT outlook (LSEG data). Below: how the March themes held up and which core assumptions broke (the deals themselves are in TMT mega-deals of 2025-2026).
That is the 2026 pattern: fewer, larger deals, concentrated in technology, where a handful of megadeals (above $5 billion in PwC's data) lift aggregate value even as deal count falls. Technology deal value alone rose 67% to $420 billion, led by very large investments in OpenAI, Anthropic and xAI, while telecom value rose 25% to $38 billion.
How the Five 2026 Themes Played Out
All five March themes still locate the large deals, but the evidence changed the details, most sharply in software and telecom.
| Theme | March 2026 expectation | How 2026 played out |
|---|---|---|
| AI infrastructure and power | Data center, power and neocloud deals | AI drove most of the value, often through minority stakes and capacity agreements |
| Software consolidation | PE take-privates of dislocated public software | Take-private volume fell; AI-exposed assets became harder to finance |
| Cybersecurity platforms | More $20-30 billion platform deals | Palo Alto/CyberArk ($25 billion) closed in February, Alphabet/Wiz ($32 billion) in March |
| Media and streaming | More consolidation after Paramount/WBD | Paramount/WBD (about $110 billion) closed October 6; Fox agreed to buy Roku ($22 billion) |
| Telecom | Portfolio separation: fiber, tower and media exits | Consolidation: Verizon/Frontier, EchoStar spectrum sales, Charter/Cox |
In AI, PwC finds the key assets too large to buy outright, so buyers secure AI ecosystem access through minority stakes and long-term compute commitments (the capex behind it is tracked in the AI investment cycle article). Telecom reversed direction, from selling assets to telecom consolidation, a wave covered in telecom and cable consolidation, with the mechanics in telecom M&A dynamics; media followed the streaming consolidation script.
Two Assumptions That Turned
From Easing Rates to a Rate Hike
The March view leaned on easing interest rates. Instead, on September 16, 2026 the Federal Open Market Committee raised the federal funds target range by a quarter point to 3.75-4.00%, its first increase since July 2023, saying inflation remains elevated. For leveraged buyouts, higher base rates raise the cost of new floating-rate debt, lower the price a sponsor can pay at a target return, and make cash-rich strategic buyers stronger bidders.
The Software Sell-Off Cut Both Ways
The software take-private thesis assumed public-market dislocation would hand sponsors cheap targets. The dislocation came: Reuters reported that the S&P 500 software and services index lost more than 26% from late January to its April low, in the "SaaSpocalypse" sell-off driven by fears that AI agents would erode seat-based software.
- Take-Private
A take-private is the acquisition of a publicly listed company, usually by a private equity sponsor using substantial debt, after which the shares are delisted. The sponsor's return depends on the entry price, the leverage lenders will provide and the value a later buyer or IPO market will pay at exit.
But lower multiples also cut the exit values of software companies sponsors bought in 2021-2022, and PwC found take-private volume fell again in early 2026, software most of all. The deals that cleared were platforms embedded in core workflows, such as Hg's $6.4 billion OneStream take-private; the index itself was back in positive territory by October. The SaaS valuation reset covers the multiple compression and the stuck 2021-2022 cohort.
PE as Both Buyer and Seller in 2026
Sponsors stayed on both sides of the market, and the story was capital rotation, not retreat. PwC notes sponsors underwriting fewer software assets and leaning into AI-enabling layers (IT services, semiconductors, equipment), the territory of IT services roll-ups and technology buyout strategies. On the sell side, LP pressure for distributions persists, and the IPO market reopened only at the very top, with SpaceX's record listing, an exit smaller software companies still lack.
The rest of 2026's evidence points one way: value keeps concentrating in a few strategic megadeals and AI capital commitments, while sponsor-led software activity stays selective as long as borrowing costs are rising. For TMT bankers, fees cluster in fewer, larger mandates, and the financing view of a deal matters as much as the strategic one.
