As April showers brought May flowers, they also brought a whole new wave of AI-centric M&A.
Consider the snowballing deal count: On May 5, reports emerged that OpenAI is acquiring AI coding startup Windsurf in a deal worth $3 billion. That day, Upstarts Media was the first to report Databricks was acquiring open source database company Neon for $1 billion. The Databricks-Neon deal was then confirmed last week, as Salesforce almost simultaneously announced plans to acquire Convergence.ai, an agentic AI startup out of London, for undisclosed financial terms.
And then yesterday, a veritable blockbuster—OpenAI announced its intention to acquire Apple design legend Jony Ive’s AI device startup in a deal that values it an incredible $6.5 billion. (The deal is interesting in its own right, making Ive the most expensive designer in history and underscoring the soaring ambitions of OpenAI, whose valuation has soared to $300 billion, up from $14 billion in 2021).
One way to look at the wave of recent AI deals is that it’s a self-reinforcing cycle, with deals begetting more deals.
“The big companies see the wave and say ‘Hey, we better innovate or we’re going to be antiquated,’” said Rob Rueckert, partner at Sorenson Capital. “They’re hungry not to be dinosaurs, so I think there’s a lot more acquisitions happening now.”
He notes that acquisitions have always been the main outcome for software companies: “It’s always been 80% to 90% of outcomes. Just right now, since there have been few IPOs, it’s almost 100% the case.”
As it turns out, the IPO market actually showed signs of life this week, as both Hinge Health and MNTN went public, both jumping in their market debuts. But the bigger point—or, perhaps, the bigger question—is what the recent wave of acquisitions says about the AI boom. Are all these deals a sign that the AI boom is maturing?
In some ways, there’s no indication that AI’s backers are slowing down. In Q1 2025, 71.1% of total value in U.S. startup funding was funneled into AI and machine learning companies, according to PitchBook. (Granted, much of that surging deal value can be attributed towards capital flowing in the direction of the big guns—including OpenAI, Anthropic, and xAI.)
On the other hand, it’s hard not to see the signs of consolidation in all the recent acquisition activity.
“Looking at this as more of a market framework, I’d characterize this as probably being at a mid-stage of the AI boom as opposed to the end,” said Otherwise Fund managing director Terrence Rohan.
“I think an end game would probably look a little bit different, but this definitely doesn’t happen at the beginning. There’s definitely a sense of ‘Oh, we can still build.’ But maybe we’re at some mid-stage of maturity where people say ‘Hey, we could go [get acquired] for $10 billion, but we’ve got a billion in hand.’ That’s a real boardroom discussion.”
AI right now seems to be caught between its past and future—a dynamic that’s playing out in deals and venture capital at-large. After a jetstream of capital propelled startups in 2021 and 2022, business conditions have changed. And some startups are feeling the pressure.
“[Over the last few years] companies learned they couldn’t burn money at-all-costs,” Rueckert told Fortune. “So, they got efficient but now that growth has slowed, there’s no pathway for them to go public…I think there are a lot of companies right now looking to find a home, and I mean a lot of them.”
The good news, as the past month’s deals demonstrate, is that large companies have proven willing to roll out the red carpet and bring some of these AI startups in-house. For large companies looking to bolster valuations and shore up their position in the private markets, and for those making it work in the public markets, there’s incentive to invest in innovation (for which acquihires are one path).
But as happens in any boom, when the music stops there won’t be enough chairs for everyone. “We’re going to see this collision between companies that need to find a home and not enough people willing to buy them,” Rueckert says. “So you’re going to have companies with nowhere to go, and who have to shut their doors.”
Clearly we’re not there yet. But as one big deal check after another is signed, it’s never too early to think about where, and when, this ends.
Have a great Memorial Day and see you Tuesday,
Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
Submit a deal for the Term Sheet newsletter here.
Nina Ajemian curated the deals section of today’s newsletter. Subscribe here.
VENTURE DEALS
- Airwallex, a Singapore-based global payments and financial platform, raised $300 million in Series F funding at a $6.2 billion valuation from Square Peg, DST Global, Lone Pine Capital, and others.
- LMArena, a San Francisco-based AI models evaluation open community platform, raised $100 million in seed funding. a16z and UC Investments led the round and were joined by Lightspeed, Laude Ventures, Felicis, and others.
- RevenueCat, a San Francisco-based consumer app monetization platform, raised $50 million in Series C funding. Bain Capital Ventures led the round and was joined by existing investors Index Ventures, Y Combinator, Adjacent, and others.
- FORE Biotherapeutics, a Philadelphia-based cancer therapies developer, raised $38 million in Series D-2 funding from SR One, Medicxi, OrbiMed, and others.
- CX2, an El Segundo, Calif.-based electronic warfare technology developer, raised $31 million in Series A funding. Point72 Ventures led the round and was joined by 201 Ventures, Pa
- Palmstreet, a San Francisco-based rare plants, handmade crafts, and other goods live-shopping app, raised $25 million in funding. a16z, Craft Ventures, and Headline led the round and were joined by others.
- Keep, a Toronto-based financial platform for small businesses, raised $23 million in funding. Tribe Capital led the round and was joined by Rebel Fund, Liquid2 Ventures, Cambrian, and others.
- FanBasis, a Miami-based digital businesses operating system, raised $20 million in Series A funding. Left Lane Capital led the round and was joined by Ryan Serhant, Upside Ventures, Gerard Piqué, and Connexa Capital.
- iAltA, a New York City-based private markets infrastructure company, raised $20 million in funding from WestCap and founders Laurence A. Tosi, Scott Ganeles, and Bill Sherman.
- SparkCharge, a Somerville, Mass.-based EV charging network operator, raised $15.5 million in Series A-1 funding. Monte’s Fam led the round and was joined by Collab Capital, Cleveland Avenue, Non-sibi Ventures, and others.
- Pixee, a Baltimore-based automated product security platform, raised $15 million in seed funding. Decibel and Wing VC led the round and were joined by TEDCO, PrimeSet, Zach Holman, and others.
- GrowthX, a San Francisco-based AI-powered marketing platform, raised $12 million in Series A funding. Madrona led the round and was joined by angel investors.
- Parkade, a San Francisco-based private parking management technology platform, raised $10 million in Series A funding. Navitas Capital, MassMutual Ventures, and 9Yards Capital led the round and were joined by existing investors CRV, Heartland, and Box Group.
- Zoca, a Tempe, Ariz.-based AI-powered marketing solution, raised $6 million in seed funding. Accel led the round and was joined by GTMfund, Elevation Capital, and Better Capital.
- RoboForce, a Milpitas, Cali.-based robotic labor system developer, raised $5 million in funding from Myron Scholes, Gary Rieschel, and others.
- VOYA Games, a Berlin-based game studio, raised $5 million in funding. 1kx and Makers Fund led the round and were joined by RockawayX and angel investors.
- WellTheory, an Atherton, Calif.-based AI-powered autoimmune care platform, raised $5 million in funding from Samsung Next, Opal Ventures, Up2 Fund, and existing investors Accel, OVO Fund, and BoxGroup.
- Final Boss Sour, a Los Angeles-based gaming-themed sour snack brand, raised $4 million in Seed 2 funding from Melitas Ventures, DMG Ventures, Simple Food Ventures, Air Ventures, and existing investors GFR Fund and Uncommon Denominator.
- PlaySafe ID, a London-based digital identity platform for online gaming, raised $1.1 million in pre-seed funding. Early Game Ventures led the round and was joined by Hartmann Capital and Overwolf.
PRIVATE EQUITY
- Ardian agreed to acquire a majority stake in MasterGrid, a Grenoble, France-based electrical infrastructure maintenance services provider and equipment manufacturer, from Andrea Partners. Financial terms were not disclosed.
- Cap Vert, a portfolio company of Ambienta, acquired Bernard Bois, a Bourron-Marlotte, France-based wooden outdoor furniture and structures manufacturer. Financial terms were not disclosed.
- Fortra, backed by Harvest Partners, TA Associates, Charlesbank Capital Partners, and HGGC, acquired the cloud security business of Lookout, a Boston-based cybersecurity company. Financial terms were not disclosed.
- Gemspring Capital Management agreed to acquire the polymer chemicals business of Goodyear, an Akron, Ohio-based tire and rubber company. Financial terms were not disclosed.
- Protective Industrial Products, a portfolio company of Odyssey Investment Partners, acquired the personal protective equipment business of Honeywell, a Charlotte-based technology company. Financial terms were not disclosed.
- Providence Equity Partners acquired a majority stake in GCL, a New York City-based live events and luxury goods company, from ATL Partners. Financial terms were not disclosed.
EXITS
- EQT agreed to acquire Seven Seas Water Group, a Tampa and Houston-based Seven Seas company, from Morgan Stanley Infrastructure Partners. Financial terms were not disclosed.
- Greenbriar Equity Group agreed to acquire a majority stake in West Star Aviation, an East Alton, Ill.-based private business aviation maintenance, repair, and overhaul services provider, from The Sterling Group. Financial terms were not disclosed.
- Tikehau Capital acquired EYSA, a Madrid-based intelligent mobility solutions provider, from H.I.G. Capital. Financial terms were not disclosed.
OTHER
- OpenAI acquired io, an AI product startup founded by iPhone creator Jony Ive, for $6.5 billion.
- Alation acquired Numbers Station AI, a Seattle and Menlo Park, Calif.-based data workflow agentic AI developer. Financial terms were not disclosed.
- Baleon Capital acquired a minority stake in Sayvant, a San Francisco-based AI-powered clinical documentation solution. Financial terms were not disclosed.
IPOS
- Hinge Health, a San Francisco-based musculoskeletal care devices developer, raised $437 million in an offering of 13.7 million shares (38% secondary) priced at $32 on the NYSE. The company posted $432 million in revenue for the year ending March 31, 2025. Insight, Atomico, 11.2 Capital, Coatue, Tiger Global, and Bessemer Venture Partners back the company.
- MNTN, an Austin-based TV advertising software provider, raised $187 million in an offering of 11.7 million shares (28% secondary) priced at $16 on the NYSE. The company posted $246 million in revenue for the year ending March 31, 2025. Baroda Ventures, Mercato Partners, Greycroft, Qualcomm, MGD Holdings, Bonfire Ventures, BlackRock, Fidelity, Peak Investment Holdings, Sylvina Capital, Anna McMurphy, Brederode, Dogwood Acquisition, George Dewey, IAG Capital Partners, Marwan Soghaier, Mohammad Hassan Afkham-Ebrahimi, and Staley Capital back the company.
- Jefferson Capital, a Minneapolis-based consumer debt purchaser, filed to go public on the Nasdaq. The company posted $488 million in revenue for the year ending March 31, 2025. J.C. Flowers backs the company.
FUNDS + FUNDS OF FUNDS
- Munich Re Ventures, the San Francisco-based venture capital arm of Munich Re Group, raised $125 million for its fifth fund and second fund from HSB focused on built world startups.
- ECP Growth, a Greenwich, Conn.-based investment firm formerly known as Emil Capital Partners, raised $100 million for its fourth fund focused on the consumer value-chain.
PEOPLE
- Great Hill Partners, a Boston-based private equity firm, promoted to Mike Thompson to managing director, head of growth team.
- J.P. Morgan Life Sciences Private Capital, the New York City-based venture and growth equity arm of J.P. Morgan Asset Management, added Dashyant Dhanak as a venture partner. Previously, he was at Deciphera Pharmaceuticals.