Generative AI reduces M&A costs by 20%, McKinsey says

Dive Brief:

Generative artificial intelligence has transformed the merger-and-acquisition process in just a few years, cutting deal timelines by 10% to 30% and reducing costs by roughly 20%, according to McKinsey.
The technology helps companies identify M&A opportunities faster, including those driven by geopolitical shifts, supply chain disruptions and regulatory change, McKinsey said in a report this month outlining the dealmaking outlook for 2026.
“The many use cases for gen AI keep evolving and growing stronger,” McKinsey said. The time and cost savings figures cited by McKinsey were based on a survey conducted in February 2025, a spokesperson said.

Dive Insight:

AI is increasingly taking center stage in studies on M&A trends, both as a dealmaking tool and a driver of investments.

In early 2025, Bain & Company reported that about one in five surveyed companies were using generative AI in M&A processes, with more than half expecting to integrate it into their dealmaking by 2027.

“We expect that companies that master the use of generative AI in M&A over the next five years will identify targets faster than their competitors, underwrite more deal value with confidence, execute diligence and integration activities more rapidly with fewer resources and ultimately deliver higher M&A-assisted total shareholder returns,” the Bain report said.

Meanwhile, interest around acquisition targets in the fast-growing AI space helped fuel an overall spike in M&A activity last year, despite uncertainty triggered by major shifts in economic policy, according to a December analysis by Big Four accounting and consulting firm PwC. During the 11-month period ending in November 2025, more than 20% of U.S. mega-deals valued at $5 billion or more had an “AI theme,” PwC said.

Overall, global M&A deal value grew to $4.7 trillion in 2025, up 43% from a year earlier and 20% higher than the 10-year average of $3.9 trillion, McKinsey said in its report.

Large transactions played a major role in the spike, as top companies absorbed the shock of geopolitical and trade challenges last year. The number of deals valued at $10 billion or more expanded to 60 — the most since the M&A peak in 2021 after the COVID-19 pandemic, McKinsey researchers said.

“Economic effects were lighter than anticipated, balance sheets remained strong, monetary policies lowered the cost of capital and the buzz around AI contributed to growing optimism,” they said.