The technology sector’s mergers and acquisitions (M&A) landscape, which showed promising signs of revival in early 2025, has encountered significant setbacks due to recent tariff escalations initiated by the Trump administration. These developments have introduced a wave of uncertainty, causing both strategic buyers and investors to reassess their positions.
Early Signs of Recovery
At the outset of 2025, the tech M&A market exhibited encouraging momentum. Data from PitchBook indicated that the first quarter saw 205 U.S. startup acquisitions, including notable deals such as CoreWeave’s $1.7 billion acquisition of Weights & Biases, ServiceNow’s $2.9 billion purchase of Moveworks, and Google’s $32 billion acquisition of cybersecurity firm Wiz. These transactions suggested a resurgence in deal-making activities, fueled by recovering late-stage startup valuations and a more M&A-friendly stance from the Trump administration compared to its predecessor.
Impact of Tariff Announcements
The optimism was short-lived. On April 2, President Trump announced sweeping tariffs ranging from 10% to 50% on imports from major trading partners, including China, Canada, and Mexico. This move triggered immediate volatility in global markets, with tech stocks experiencing significant declines. For instance, Apple, heavily reliant on Chinese manufacturing, saw its stock plummet by over 9%, while Nvidia and Tesla faced declines of 4% and 4.5%, respectively. The Nasdaq Composite recorded its worst day since the pandemic, underscoring the market’s sensitivity to trade policy shifts.
M&A Activity Under Pressure
The tariff-induced market instability has had a pronounced effect on M&A activities. Companies like Swedish fintech Klarna and U.S.-based Chime have postponed their initial public offerings (IPOs) due to the uncertain environment. Similarly, Israeli financial services company eToro delayed investor presentations, reflecting a broader trend of caution among firms considering public listings. A London-based private equity firm even withdrew from a European tech acquisition at the last minute, citing market volatility as a primary concern.
Investment banks have responded by adjusting their strategies. Some are incorporating clauses to delay payments and mitigate new market risks. For example, Silver Lake Partners’ $4.46 billion acquisition of a majority stake in Intel’s programmable chip business Altera included provisions to defer one-third of the payment to enhance internal return metrics. These adaptations reflect a broader industry trend of seeking creative solutions to navigate the current economic landscape.
Broader Economic Implications
The uncertainty stemming from the tariff announcements has broader economic implications. Global M&A volumes fell sharply—29% in early April year-over-year—after a strong start in the first quarter. The U.S. saw a 13% decline in M&A volume, dropping to $436.56 billion. Investment banking fees globally have dropped 4.9% since a year ago, with analysts projecting lower earnings for major banks involved in M&A. The core issue is not the tariffs themselves but the prevailing uncertainty, which undermines executive confidence and impairs valuation and financing conditions.
Future Outlook
While some strategic deals continue to move forward, driven by their long-term value and feasibility, the overall outlook for the tech M&A market remains tepid. The combination of market volatility, economic policy uncertainties, and the potential for further tariff escalations has created a challenging environment for deal-making. Companies and investors are likely to proceed with caution, seeking stability before committing to significant transactions.
