TMT Leaders Signal M&A at MS Conference
The annual Morgan Stanley TMT Conference is underway, with executives from AT&T, Sirius XM, and News Corp presenting. Key themes emerging from the bellwether event include using strategic M&A as a primary growth lever, alongside AI-driven cost cuts and new content monetization strategies.
A broader look at the TMT sector reveals a significant rebound in M&A activity, with global deal values climbing 49% in 2025 to hit an estimated $4.9 trillion, the second-highest year on record. Technology deals dominated, accounting for 76% of the total value, as buyers placed larger, more strategic bets instead of pursuing a higher volume of smaller transactions. Artificial intelligence has become the central catalyst for megadeals, with 85% of the largest corporate technology transactions in 2025 directly involving AI themes. This trend is fueled by massive capital availability; private equity firms entered 2026 with a record $3.2 trillion in dry powder, over $1.1 trillion of which is earmarked for buyouts. AT&T COO Jeff McElfresh detailed the company's focus on expanding its fiber network, reiterating a goal to reach over 60 million locations by 2030. This expansion follows the recent closing of its acquisition of Lumen's mass-market fiber business, a move intended to bolster its converged services strategy. The company also signaled a robust capital return plan, promising over $45 billion to shareholders between 2026 and 2028. News Corp CEO Robert Thomson highlighted a strategy centered on digital growth and monetizing content through AI partnerships, including a significant deal with OpenAI. The company has seen 11 consecutive quarters of year-over-year EBITDA growth and expanded its share buyback program by $1 billion. On the cost-cutting front, AI is being positioned as a key tool for telcos to manage expenses. Bain & Company analysis suggests AI could boost workforce productivity by 15% to 25% in the coming years, while other reports indicate AI-driven automation can cut operational costs by up to 30%. Vodafone, for example, reduced checkout times by 47% using its AI chatbot, TOBI. Sirius XM CEO Jennifer Witz addressed the company's subscriber challenges by outlining plans for new pricing strategies, including a low-cost, ad-supported subscription model set to launch this year. Amid declining revenue and subscriber numbers in 2025, the company is targeting $200 million in annualized run-rate savings to improve its financial footing.
