Acquisition activity in the IT services sector is gathering pace as companies are moving rapidly to strengthen their artificial intelligence (AI) capabilities, and therefore opting to buy niche specialists rather than rely on slower in-house development cycles.
According to analysts, the shift reflects the speed at which AI adoption is unfolding across enterprise clients. With use cases evolving faster than traditional software development timelines, IT services firms are finding it more efficient to acquire focused AI, data and analytics players that can be integrated quickly into existing offerings. The targets, for now, are largely smaller specialist firms with deep capabilities in specific domains.
Strategic Shift in Deal-Making
This strategy is visible across the market, cutting across large-cap and mid-tier companies. In late 2025, HCLSoftware, a subsidiary of HCLTech, announced a $240 million acquisition of Jaspersoft from Cloud Software Group, along with the purchase of Belgium-based AI startup Wobby. The twin deals are aimed at strengthening embedded analytics, data management and agentic AI capabilities within its Actian data and AI division.
These transactions underline a broader pattern in the market, where acquisitions are being positioned less as scale plays and more as capability upgrades. Jaspersoft adds pixel-perfect reporting and embedded analytics widely used in regulated industries, while Wobby brings natural language-driven AI data analyst agents. Both are areas that would take considerable time to replicate internally.
Other large players are taking a similar route. Tata Consultancy Services recently announced the acquisition of ListEngage, a Salesforce-focused digital transformation and services firm that helps enterprises deepen platform adoption and build AI-enabled customer experiences. Analysts said such deals signal a push to offer AI as an integrated service rather than as a set of standalone tools.
Mid-tier firms are also stepping up. Coforge’s proposed acquisition of Encora is among the largest transactions by a mid-sized player and is being positioned as a step-change in AI-led engineering, cloud and data services rather than a pure expansion of scale. Together, these moves suggest that large and mid-sized firms are increasingly competing for the same pool of specialised AI talent and intellectual property.
At the same time, analysts cautioned that large-cap companies are unlikely to acquire mid-sized peers, given that such integrations have historically delivered mixed outcomes.
Private equity is expected to further fuel deal activity. Some funds may look to exit AI-focused investments after sharp valuation run-ups, creating a pipeline of potential targets, while others could seek to build AI-centric platforms through selective acquisitions.
Pivoting from Human Labor to AI Autonomy
Pressure is also building in the business process outsourcing segment. As automation and agentic AI begin to disrupt traditional outsourcing models, firms with limited balance sheet strength or technical depth may be forced to acquire niche AI capabilities or become acquisition targets themselves. Capgemini’s $3.3 billion acquisition of WNS highlights the strategic pivot towards AI-led business transformation in business process services.