The landscape of global business is undergoing a profound transformation, driven by artificial intelligence and an invigorated capital market, according to Kim Posnett, Goldman Sachs’ global co-head of investment banking. As 2026 unfolds, a confluence of factors is setting the stage for what many anticipate will be a period of significant activity in mergers and acquisitions, alongside an unprecedented surge in initial public offerings. Posnett, a prominent figure in the financial sector and a Fortune Most Powerful Woman, recently shared insights ahead of the World Economic Forum, highlighting how these forces are converging to redefine corporate strategy and investment opportunities.
A key element of this evolving environment is the maturation of artificial intelligence. What was once largely experimental in 2025 has now transitioned into an industrial driver, fundamentally altering how companies operate and strategize. Technical breakthroughs, such as DeepSeek-R1’s open-source reasoning model challenging established closed systems early in 2025, and the half-trillion-dollar Stargate joint venture signifying a new era in AI infrastructure, marked pivotal moments. By the year’s end, the simultaneous launch of advanced models like OpenAI’s GPT-5.1 Pro and Google’s Gemini 3 underscored a rapid escalation in capabilities, pushing boundaries in deep thinking and autonomous agentic workflows. This shift means that boardrooms are no longer asking “what is AI?” but rather “how quickly can we deploy it?” Companies are moving beyond pilot programs, integrating AI not just as a feature, but as a foundational element for productivity and operational leverage, seeking measurable returns on investment from AI-led processes.
This technological acceleration is creating a fertile ground for strategic mergers and acquisitions. The M&A market, which saw a 44% year-over-year increase in volume by 2025, is now characterized by bold, strategic dealmaking. Companies are not merely consolidating for scale; they are actively acquiring critical AI capabilities, strategic assets, and digital infrastructure essential for the next decade. There’s a palpable sense within boardrooms that inaction poses the greatest risk in an AI-industrialized economy. This sentiment is fueling high-conviction transactions, allowing companies to both protect their core businesses and aggressively pursue growth through strategic leapfrogging. Financial sponsors are also re-entering the M&A arena with renewed vigor, driven by approximately $1 trillion in global dry powder and a substantial backlog of unmonetized portfolio companies. The narrowing bid-ask spread and more constructive financing markets in 2025 have paved the way for increased sponsor activity, focusing on take-privates and strategic carveouts while simultaneously leveraging reopened monetization paths like IPOs.
Beyond M&A, the capital markets are bracing for an IPO “mega-cycle” unlike any seen before. This upcoming wave is anticipated to feature not only an unprecedented volume of deals but also some of the largest IPOs in market history. Unlike previous surges, such as the dot-com boom of the late 1990s or the 2020-2021 period dominated by numerous billion-dollar listings, this cycle is expected to bring institutionally mature titans to public markets. Many companies have remained private longer, raising substantial capital and achieving valuations and operational scales previously unseen in private markets. The top ten private tech companies today, for instance, are valued at $3 trillion, a tenfold increase from 2018. These are not merely “unicorns” but global enterprises with the gravitas of Fortune 500 incumbents at the time of their public debut. This reopening of the IPO window presents a generational opportunity for investors to engage with companies poised to define the next century of global business, marking a significant re-weighting of public indices.
However, this rapid progress is not without its complexities, particularly concerning regulation. As AI scales across consumer, enterprise, and sovereign levels, a divergence in global policy is emerging. The United States, through executive orders like the January 2025 ‘Removing Barriers’ and ‘Genesis Mission,’ has signaled a focus on accelerating infrastructure and prioritizing American AI dominance. In stark contrast, the European Union’s AI Act imposes strict guardrails on “high-risk” systems. The United Kingdom, meanwhile, has adopted a hybrid “pro-innovation” model, balancing safety with significant investment in compute and ‘AI Growth Zones’. For multinational clients, this fragmented regulatory landscape necessitates strategic planning and arbitrage, influencing decisions on where to build, deploy, and partner to maintain a competitive edge. The overarching theme for 2026, as Posnett suggests, is a total rethinking of business processes and capital allocation, driven by the relentless pace of innovation and the pervasive influence of AI.
