Tech M&A has been thwarted by regulators, but dealmakers skeptical that election will change much
Lina Khan, chair of the U.S. Federal Trade Commission, and Jonathan Kanter, assistant attorney general for the Justice Department’s antitrust division, participate in a discussion on antitrust reforms at the Brookings Institution in Washington on Oct. 4, 2023. Khan assumed the role of FTC chair in June 2021 after being appointed by U.S. President Joe Biden and confirmed by the Senate.
Drew Angerer | Getty Images
Google had been in talks to acquire marketing software maker HubSpot earlier this year, but no deal took place. The company then made a run at cybersecurity startup Wiz. But that didn’t happen either.
Google took a different tactic in closing its one notable transaction of late. Following a model pursued by Amazon and Microsoft to lure experts in artificial intelligence, Google announced last month it was hiring the founders of generative AI startup Character.AI. Rather than buying Character outright and shutting it down — the standard acquihire playbook — Google kept the startup alive and entered into a licensing deal for its technology.
This is the new world of tech M&A. Under the Biden administration, and more specifically Federal Trade Commission head Lina Khan, the biggest companies have been thwarted from pursuing large deals. In some cases, they’ve even walked away from smaller deals. Amazon abandoned its $1.7 billion purchase of iRobot in January after the FTC and European regulators raised concerns.
Since peaking at $1.5 trillion in 2021, tech transaction volume has plummeted, dropping to $544 billion last year, according to Dealogic. So far in 2024, that number sits at $465 billion.
Within tech, private equity buyers are the ones keeping the market afloat. In July, BlackRock agreed to buy data provider Preqin for $3.2 billion, two months after Permira announced it was buying website-building platform Squarespace in a deal valued at almost $7 billion. Thoma Bravo, a leading tech buyout firm, said in July it was selling Instructure to KKR for $4.8 billion.
Don’t expect much to change for the rest of this year. With the presidential election coming in November, the regulatory environment could be poised for a shake-up, potentially leading to the removal of deal-making barriers.
However, neither party offers much clarity for what the future would bring. Sen. JD Vance, Donald Trump’s running mate on the Republican ticket, has praised Khan’s stricter rules on mergers, and he told CNBC last week that “there should be an antitrust solution” to some of the behaviors of large tech platforms.
On the Democratic side, billionaire donors Barry Diller and Reid Hoffman have voiced concerns about Khan keeping her job if Vice President Kamala Harris wins.
“If Trump wins, I think that the regulatory environment will still be fairly challenging, and under a challenging regulatory environment, that just limits big deals,” said Andrew Luh, a partner at law firm Gunderson Dettmer who represents startups in mergers and acquisitions.
The Biden administration’s crackdown on Big Tech has gone well beyond squashing M&A.
Alphabet is in the midst of its second antitrust trial, following charges from the Justice Department that the company acted as a monopoly in search and advertising. The DOJ sued Apple on antitrust grounds in March. The FTC has cases pending against Meta and Amazon.
Couple that with a similarly rigid environment in Europe, and no deal appears safe. In December, Adobe walked away from its $20 billion agreement to purchase design software startup Figma, and paid a $1 billion breakup fee. In a statement, the companies said, “there is no clear path to receive necessary regulatory approvals from the European Commission and the UK Competition and Markets Authority.”
In July, Figma said it had completed a tender offer valuing the design software startup at $12.5 billion. Figma is viewed as a strong IPO candidate when that market eventually reopens. But alongside a plummeting M&A market, initial public offerings are also in an extended drought as companies continue to adapt to drastically reduced valuations wrought by the economic slowdown starting in 2022.
A Figma spokesperson declined to comment on the company’s plans.
Dana Rao, who at the time was Adobe’s general counsel, announced his departure earlier this month after 12 years at the company. Rao said in a December interview that Adobe leadership felt justified in pursuing Figma after the failure of its competing product design program. But regulators were taking a different view.
“We’ve had a lot of interaction with the regulators, and they’ve been very focused on the newer doctrines of antitrust law that say that future competition is a critical part of the antitrust analysis,” he said.
Jonathan Kanter, head of the Justice Department’s Antitrust Division, said in a statement after Adobe backed down that the move “ensures that designers, creators, and consumers continue to get the benefit of the rivalry between the two companies going forward.”
‘Very, very disciplined’
There are still deals taking place, outside the watchful eye of regulators.
Hewlett Packard Enterprise agreed in January to acquire networking hardware company Juniper for $14 billion. And this month, Salesforce said it was buying startup Own for $1.9 billion.
In those cases, management was less concerned about regulators and much more focused on how shareholders would respond due to the growing obsession with profitability, following the 2022 downturn.
US company Hewlett Packard Enterprise President and Chief Officer Executive Antonio Neri gives a conference at the Mobile World Congress (MWC), the telecom industry’s biggest annual gathering, in Barcelona on February 27, 2024.
Pau Barrena | AFP | Getty Images
HPE CEO Antonio Neri told CNBC that Juniper would add to non-GAAP earnings in year one.
“We have been very, very disciplined on returning invested capital, meaning every dollar spent has to deliver value to our shareholders,” Neri said in an interview. “And that’s why, in the case of Juniper, for example, we committed to a series of synergies that then more than pay for the cost of capital to make this acquisition.”
Neri told analysts in January that the two companies do business in some of the same markets, but in different verticals, and said that he didn’t anticipate protracted battles with regulators. In August, the U.K.’s Competition and Markets Authority approved the tie-up.
Sergio Letelier, HPE’s head of corporate development, said that when he and his team members advise Neri on a potential deal, they always discuss how regulators might treat it. While some transactions are taking longer to close than they would have previously, “the fundamentals of what is a problematic deal vs. what is not a problematic deal hasn’t changed,” Letelier said.
At Salesforce, CEO Marc Benioff said that Own should bolster free cash flow in the second year after the deal closed. It’s Benioff’s first billion-dollar-plus acquisition since 2021, when the cloud software vendor paid $27 billion for Slack, its largest purchase ever. The DOJ’s Antitrust Division asked for additional information on that deal before clearing it.
In an interview last week, Benioff called U.S. regulators “somewhat dysfunctional” but applauded Europe for recognizing where competition really is being harmed. He specifically pointed to a recent finding by the European Commission, the executive body of the European Union, that Microsoft had breached antitrust rules by tying Teams, its Slack competitor, to its core Office productivity applications.
“They’re the ones who are actually functional and who are doing serious work,” Benioff said, referring to the EU and U.K. “I think that it’s a big story that we’re following the Europeans in this regulatory environment.”
Since the Slack purchase, Salesforce has pursued only smaller deals, particularly after facing off with activist investors who pressured the company to put a renewed focus on profitability. Salesforce landed AI talent from buying Airkit and a Sales Cloud software add-on from Spiff.
“We’ve done more than 60 acquisitions,” Benioff said. “We’ve tried and failed a lot in M&A, but we have also succeeded in quite a few of them, especially the big ones.” Before Slack, Salesforce acquired Tableau Software and MuleSoft.
Hard to be confident
At Cisco, one of the first questions executives ask when evaluating a potential deal is how certain they are it will close, said Derek Idemoto, the networking hardware company’s head of corporate development.
“The question is, How much risk are you willing to take on the regulatory side, given how hard things are at this time and how litigious things could be,” said Idemoto, who’s worked on more than 100 deals in his nearly 17 years at the company.
Idemoto said that’s made Cisco more selective these days. Before the company announced its $27 billion purchase of data analytics software company Splunk last September, he said he viewed the risk as absolutely worth taking. Splunk sat comfortably outside Cisco’s core of networking equipment.
“Certainly it’s an offensive play for us,” Idemoto said.
The deal sailed through, even closing in March, six months ahead of schedule.
“Having a high confidence level when you sign something — that’s the Cisco way,” Idemoto said.
That level of confidence would be difficult for the megacap companies as long as the FTC and DOJ are aggressively watching them. Alphabet’s last big deal was its $5.4 billion purchase of cybersecurity company Mandiant in 2022. Microsoft closed its massive $75 billion purchase of Activision in October, but it took 20 months and a protracted fight with U.S. and European regulators. Amazon hasn’t had a billion-dollar-plus deal since closing the $3.9 billion acquisition of One Medical in early 2023.
Last month, Amazon announced it was hiring a quarter of staffers from Covariant, which builds AI models for robots. It was the company’s second AI deal in the acquihire vein, following a similar agreement with Adept in June. Even that deal attracted an informal FTC inquiry.
Amazon didn’t provide a specific comment for this story, but said acquisitions are still part of its growth strategy and “are a critical and healthy part of an innovation economy.” Microsoft and Google declined to comment.
HPE’s Letelier said that any tech company considering its acquisition strategy will have a difficult time forecasting for the future because it’s not clear what changes Vice President Harris might make if she wins in November or what Trump would do if he returns to the White House.
Trump as president blocked some deals on national security grounds, following recommendations from the Committee on Foreign Investment in the United States. Regulators under President Joe Biden, meanwhile, have filed a record number of merger enforcement actions, Bloomberg reported.
“We’re at a crossroads here, and we don’t know which side of the fork the policy is going to go,” Letelier said.
WATCH: How Big Tech is quietly acquiring AI startups without actually buying the companies
Formula One F1 – United States Grand Prix – Circuit of the Americas, Austin, Texas, U.S. – October 23, 2022 Tim Cook waves the chequered flag to the race winner Red Bull’s Max Verstappen
Mike Segar | Reuters
Apple had two major launches last month. They couldn’t have been more different.
First, Apple revealed some of the artificial intelligence advancements it had been working on in the past year when it released developer versions of its operating systems to muted applause at its annual developer’s conference, WWDC. Then, at the end of the month, Apple hit the red carpet as its first true blockbuster movie, “F1,” debuted to over $155 million — and glowing reviews — in its first weekend.
While “F1” was a victory lap for Apple, highlighting the strength of its long-term outlook, the growth of its services business and its ability to tap into culture, Wall Street’s reaction to the company’s AI announcements at WWDC suggest there’s some trouble underneath the hood.
“F1” showed Apple at its best — in particular, its ability to invest in new, long-term projects. When Apple TV+ launched in 2019, it had only a handful of original shows and one movie, a film festival darling called “Hala” that didn’t even share its box office revenue.
Despite Apple TV+ being written off as a costly side-project, Apple stuck with its plan over the years, expanding its staff and operation in Culver City, California. That allowed the company to build up Hollywood connections, especially for TV shows, and build an entertainment track record. Now, an Apple Original can lead the box office on a summer weekend, the prime season for blockbuster films.
The success of “F1” also highlights Apple’s significant marketing machine and ability to get big-name talent to appear with its leadership. Apple pulled out all the stops to market the movie, including using its Wallet app to send a push notification with a discount for tickets to the film. To promote “F1,” Cook appeared with movie star Brad Pitt at an Apple store in New York and posted a video with actual F1 racer Lewis Hamilton, who was one of the film’s producers.
(L-R) Brad Pitt, Lewis Hamilton, Tim Cook, and Damson Idris attend the World Premiere of “F1: The Movie” in Times Square on June 16, 2025 in New York City.
Jamie Mccarthy | Getty Images Entertainment | Getty Images
Although Apple services chief Eddy Cue said in a recent interview that Apple needs the its film business to be profitable to “continue to do great things,” “F1” isn’t just about the bottom line for the company.
Apple’s Hollywood productions are perhaps the most prominent face of the company’s services business, a profit engine that has been an investor favorite since the iPhone maker started highlighting the division in 2016.
Films will only ever be a small fraction of the services unit, which also includes payments, iCloud subscriptions, magazine bundles, Apple Music, game bundles, warranties, fees related to digital payments and ad sales. Plus, even the biggest box office smashes would be small on Apple’s scale — the company does over $1 billion in sales on average every day.
But movies are the only services component that can get celebrities like Pitt or George Clooney to appear next to an Apple logo — and the success of “F1” means that Apple could do more big popcorn films in the future.
“Nothing breeds success or inspires future investment like a current success,” said Comscore senior media analyst Paul Dergarabedian.
But if “F1” is a sign that Apple’s services business is in full throttle, the company’s AI struggles are a “check engine” light that won’t turn off.
Replacing Siri’s engine
At WWDC last month, Wall Street was eager to hear about the company’s plans for Apple Intelligence, its suite of AI features that it first revealed in 2024. Apple Intelligence, which is a key tenet of the company’s hardware products, had a rollout marred by delays and underwhelming features.
Apple spent most of WWDC going over smaller machine learning features, but did not reveal what investors and consumers increasingly want: A sophisticated Siri that can converse fluidly and get stuff done, like making a restaurant reservation. In the age of OpenAI’s ChatGPT, Anthropic’s Claude and Google’s Gemini, the expectation of AI assistants among consumers is growing beyond “Siri, how’s the weather?”
The company had previewed a significantly improved Siri in the summer of 2024, but earlier this year, those features were delayed to sometime in 2026. At WWDC, Apple didn’t offer any updates about the improved Siri beyond that the company was “continuing its work to deliver” the features in the “coming year.” Some observers reduced their expectations for Apple’s AI after the conference.
“Current expectations for Apple Intelligence to kickstart a super upgrade cycle are too high, in our view,” wrote Jefferies analysts this week.
Siri should be an example of how Apple’s ability to improve products and projects over the long-term makes it tough to compete with.
It beat nearly every other voice assistant to market when it first debuted on iPhones in 2011. Fourteen years later, Siri remains essentially the same one-off, rigid, question-and-answer system that struggles with open-ended questions and dates, even after the invention in recent years of sophisticated voice bots based on generative AI technology that can hold a conversation.
Apple’s strongest rivals, including Android parent Google, have done way more to integrate sophisticated AI assistants into their devices than Apple has. And Google doesn’t have the same reflex against collecting data and cloud processing as privacy-obsessed Apple.
Some analysts have said they believe Apple has a few years before the company’s lack of competitive AI features will start to show up in device sales, given the company’s large installed base and high customer loyalty. But Apple can’t get lapped before it re-enters the race, and its former design guru Jony Ive is now working on new hardware with OpenAI, ramping up the pressure in Cupertino.
“The three-year problem, which is within an investment time frame, is that Android is racing ahead,” Needham senior internet analyst Laura Martin said on CNBC this week.
Apple’s services success with projects like “F1” is an example of what the company can do when it sets clear goals in public and then executes them over extended time-frames.
Its AI strategy could use a similar long-term plan, as customers and investors wonder when Apple will fully embrace the technology that has captivated Silicon Valley.
Wall Street’s anxiety over Apple’s AI struggles was evident this week after Bloomberg reported that Apple was considering replacing Siri’s engine with Anthropic or OpenAI’s technology, as opposed to its own foundation models.
The move, if it were to happen, would contradict one of Apple’s most important strategies in the Cook era: Apple wants to own its core technologies, like the touchscreen, processor, modem and maps software, not buy them from suppliers.
Using external technology would be an admission that Apple Foundation Models aren’t good enough yet for what the company wants to do with Siri.
“They’ve fallen farther and farther behind, and they need to supercharge their generative AI efforts” Martin said. “They can’t do that internally.”
Apple might even pay billions for the use of Anthropic’s AI software, according to the Bloomberg report. If Apple were to pay for AI, it would be a reversal from current services deals, like the search deal with Alphabet where the Cupertino company gets paid $20 billion per year to push iPhone traffic to Google Search.
The company didn’t confirm the report and declined comment, but Wall Street welcomed the report and Apple shares rose.
In the world of AI in Silicon Valley, signing bonuses for the kinds of engineers that can develop new models can range up to $100 million, according to OpenAI CEO Sam Altman.
“I can’t see Apple doing that,” Martin said.
Earlier this week, Meta CEO Mark Zuckerberg sent a memo bragging about hiring 11 AI experts from companies such as OpenAI, Anthropic, and Google’s DeepMind. That came after Zuckerberg hired Scale AI CEO Alexandr Wang to lead a new AI division as part of a $14.3 billion deal.
Meta’s not the only company to spend hundreds of millions on AI celebrities to get them in the building. Google spent big to hire away the founders of Character.AI, Microsoft got its AI leader by striking a deal with Inflection and Amazon hired the executive team of Adept to bulk up its AI roster.
Apple, on the other hand, hasn’t announced any big AI hires in recent years. While Cook rubs shoulders with Pitt, the actual race may be passing Apple by.
Tesla CEO Elon Musk speaks alongside U.S. President Donald Trump to reporters in the Oval Office of the White House on May 30, 2025 in Washington, DC.
Kevin Dietsch | Getty Images
Tesla CEO Elon Musk, who bombarded President Donald Trump‘s signature spending bill for weeks, on Friday made his first comments since the legislation passed.
Musk backed a post on X by Sen. Rand Paul, R-Ky., who said the bill’s budget “explodes the deficit” and continues a pattern of “short-term politicking over long-term sustainability.”
The House of Representatives narrowly passed the One Big Beautiful Bill Act on Thursday, sending it to Trump to sign into law.
Paul and Musk have been vocal opponents of Trump’s tax and spending bill, and repeatedly called out the potential for the spending package to increase the national debt.
On Monday, Musk called it the “DEBT SLAVERY bill.”
The independent Congressional Budget Office has said the bill could add $3.4 trillion to the $36.2 trillion of U.S. debt over the next decade. The White House has labeled the agency as “partisan” and continuously refuted the CBO’s estimates.
The bill includes trillions of dollars in tax cuts, increased spending for immigration enforcement and large cuts to funding for Medicaid and other programs.
It also cuts tax credits and support for solar and wind energy and electric vehicles, a particularly sore spot for Musk, who has several companies that benefit from the programs.
“I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!” Trump wrote in a social media post in early June as the pair traded insults and threats.
Shares of Tesla plummeted as the feud intensified, with the company losing $152 billion in market cap on June 5 and putting the company below $1 trillion in value. The stock has largely rebounded since, but is still below where it was trading before the ruckus with Trump.
Tesla one-month stock chart.
— CNBC’s Kevin Breuninger and Erin Doherty contributed to this article.
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