AI fuels M&A deals across Australia & Southeast Asia

Key Insights

• AI continues to drive M&A activity across Australia and Southeast Asia
• Investors are prioritising proprietary technology, AI capability and scalable business models
• Growing demand for AI infrastructure is creating new investment opportunities, particularly in data centres and digital infrastructure.

Artificial intelligence (AI) continued to be a key driver of M&A activity in 2026. Across the region, we are seeing increased investment activity and transactions where digital transformation and AI capability are becoming prerequisites for investment decisions. We expect this trend to continue as investors increasingly seek businesses with proprietary technologies in AI and skill sets that can drive the technology.

Investor-friendly markets continue to attract AI investment

Southeast Asia, particularly in Singapore and Indonesia, appears to remain attractive for private equity and venture capital activity. The VC ecosystems and emerging technologies continue to grow, as do the deals supporting investment in the sector. With increasing adoption and development of AI across businesses, investors are finding an abundance of acquisition targets in high-growth markets across the region that can be selected and scaled for growth.

Technology-driven growth in markets such as Singapore and Australia also remains a key theme in cross-border transactions. The ease of doing business, strong growth prospects and productivity gains from AI transformation continue to make these investor-friendly countries attractive targets.

While Southeast Asia is a focal point for growth in the technology and AI sectors, the Australian M&A market appears to be focused on acquiring niche AI businesses rather than developing growth stories. Australia's robust and stable regulatory regime and mature technology sector are significant drawcards for investors, particularly when combined with a growing VC ecosystem across the country's major cities. Even smaller markets such as Canberra are experiencing significant investments and cross-border deal activity in this space.

AI Infrastructure

The rapid growth of AI is also driving increased investment in support infrastructure. Demand for hyperscale data centres continues to increase as businesses invest in the computing power and storage capacity required to support the use of AI.

Melbourne appears to be the fastest growing centre for data centre investment due to the abundance of land opportunities compared to Sydney. How the regulatory landscape evolves alongside the adoption of AI infrastructure and related M&A activity will be an interesting trend to watch.

Looking ahead

M&A activity involving AI is expected to remain strong across the region over the next 12 months. As investors become increasingly selective on deals with AI fuelled companies, businesses with strong financials and a defendable pipeline of potential business will continue to attract interest, particularly as AI adoption expands across industries.

The Australian Prime Minister's recent announcement of an AI Office only heightens the prominence of AI in the M&A landscape in Australia and the Southeast Asia.