AI Startups That Founders and VCs Say Could Be Acquisition Targets in 2026

Posted on by

As 2025 comes to a close, I’m reflecting on what’s ahead—2026—just like nearly everyone else.

For private markets, this translates to constant focus on AI. However, I believe next year will be a reality check for both AI startups and major players. Rising compute expenses, shrinking margins, and inflated valuations and expectations will finally hit practical limits. Consequently, some companies will likely pursue even more acquisitions and talent hires than witnessed during the current AI surge.

I began surveying experts: What startups would represent intelligent acquisition opportunities for major tech companies in 2026?

“To enable practical AI applications such as robotics, self-driving cars, intelligent manufacturing, spatial computing, and embodied artificial intelligence, major tech firms require models capable of real-time real-world reasoning,” stated Aidan Madigan-Curtis, partner at Eclipse Ventures, in a text message. “Companies including Wayve, Physical Intelligence, WorldLabs, Bedrock Robotics, The Bot Company, and GenesisAI are already developing simulation platforms, sensor integration systems, and world models that learn through physical interaction—technologies that would take established players years to develop from scratch.” (Eclipse has invested in Wayve.)

Madigan-Curtis raises a critical question: When does acquiring make more sense than building in AI? Shensi Ding, CEO and co-founder of AI integration infrastructure company Merge, suggests an unconventional approach for finance (a frequently promoted AI application): “Major AI companies should purchase boutique investment banks and leverage their historical financial models for training. This field demands deep specialization and domain knowledge to truly innovate and establish credibility.”

Meanwhile, Morgan Blumberg, principal at M13, believes major foundation model companies will seek to acquire application-layer firms with established product-market fit. The clear targets: programming tools, which represent one of enterprise AI’s standout successes in 2025.

“During 2025, Windsurf in the coding sector drew significant attention,” Blumberg noted via text. “Although some companies like Cursor may opt to remain independent, I anticipate favorable pricing for companies such as Factory, Codegen, Warp, and others.”

Zach Lloyd, CEO and founder of agentic coding startup Warp, emphasized that developers represent a crucial customer segment: “AI leaders should purchase an observability platform like or Sentry,” he wrote in an email. “These solutions operate at the intersection of code and real-world performance—handling logs, errors, traces, and production issues—which provides precisely the context AI requires to deliver genuine value to developers.”

This drive to perfect enterprise applications extends beyond foundation model leaders like OpenAI and Anthropic, and for certain major corporations, purchasing a unicorn outright could be perfectly logical, according to Jake Stauch, CEO and founder of Serval, which develops AI agents for IT. “They might consider acquiring enterprise AI solutions for customer support or enterprise search, such as Sierra or Glean respectively,” he stated.

It’s worth noting: Nearly any such transactions materializing would be significant events. However, every potential acquisition target warrants careful examination. Massive amounts of funding have poured into numerous AI companies. And as far as I know, even under the most favorable conditions, there are only so many generation-defining public companies possible.

This marks the final Term Sheet for 2025, and upon our return on January 5, we’ll present our popular Crystal Ball prediction series. So, I’ll offer one personal forecast: In the coming year, we’ll begin to see through the fog of abundant funding and hype-filled talk, and discover which companies truly have staying power.

See you in 2026,

Allie Garfinkle
X:
Email:
Submit a deal for the Term Sheet newsletter .

The deals section will return in 2026. .