In Q1 2025, the Vertical Applications subsector remained the largest by volume in terms of M&A activity, the same as last year, with 51 deals representing 13% of total transactions. It was followed by Information Management and IT Services which represented 12% and 10% of deal volumes, respectively. Other AI subsectors in high demand included CRM, ERP, Security and Business Intelligence.

AI companies in the Security sector achieved the highest disclosed multiples at a striking 15 times revenue followed by IT Services at 4.8 times revenue, Internet Content & Commerce at 4.5 times revenue and Industry-specific Applications at 4.1 times revenue. The largest disclosed deal value in the AI sector reached $4.2B in Q1 with the median disclosed M&A deal size at $40M.