AI M&A activity in the Asia-Pacific region is proving to be a notable exception amidst broader economic challenges. While overall deal-making in the area has slowed due to economic uncertainty, rising interest rates, geopolitical issues, and election schedules, AI-focused technology deals have shown resilience. Industry trackers have reported a 5%-10% increase in the aggregate value of these deals during 2024, with early-2025 valuations also showing an upward trend despite a decrease in volume.
Market observers attribute this strength to a scarcity premium linked to the limited availability of unique models, proprietary datasets, and specialized teams. This ongoing enthusiasm for AI has kept bidding pressure and valuations high. However, this scarcity premium does not excuse weak economics or cover risks associated with acquiring an AI business. Although buyers might cite “capability premiums,” they face tighter liquidity due to higher interest rates and increased regulatory scrutiny related to foreign direct investment, export control, and data localization.
A credible monetization pathway—whether through cost synergies, accelerated product launches, or data-driven revenue—is becoming essential for defending headline multiples. The execution risk is also on the rise as national security reviews and more assertive antitrust scrutiny make cross-border AI deals more complex. Preserving value depends significantly on retaining human talent and expanding acquired capabilities.
The APAC M&A Legal Playbook 2025 examines these trends as of Q1 2025. Interest from financial investors and strategic players seeking inorganic capability growth remains high; however, challenges are increasing.
