A growing body of evidence demonstrates that mergers and acquisitions (M&A) are essential to U.S. innovation. At the same time, the White House’s America’s AI Action Plan, released in July 2025, places rapid private-sector integration at the center of national AI strategy. Yet over-enforcement of antitrust laws and regulatory burdens threaten to undercut this strategy.

M&A Is a Driver of Breakthrough Innovation

The history of U.S. technological leadership is inseparable from strategic M&A. Dynamic acquisition markets stimulate and reward innovation.

A seminal study by Phillips and Zhdanov (2013) found that industries with higher takeover activity see stronger R&D investment, especially among early-stage firms. Startups innovate more when acquisition is a viable reward for risk-taking.

These outcomes have played out in the real world:

— NVIDIA’s 2020 acquisition of Mellanox enabled the integration of GPUs and high-speed networking, creating the compute infrastructure that powers today’s leading AI models.

— On the reverse, after its acquisition by Amazon was blocked, the American company that invented the Roomba, iRobot, is now on the verge of going out of business.

Unfortunately, we have seen the impact of a decline in M&A activity in the last few years, according to a study by the Computer & Communications Industry Association (CCIA). The overenforcement of antitrust law led to a “merger tax” which sharply reduced acquisitions of smaller startups that could not IPO. The result was reduced exit multiples, increased shutdowns, and constrained venture capital returns. 

This shows how M&A brings together resources—data, capital, compute, and talent—at a scale that startups alone can’t marshal. 

The AI Action Plan Relies on Private-Sector Speed and Scale

The America’s AI Action Plan outlines the U.S. strategy to secure global AI leadership. Its three pillars are Accelerating AI Innovation, Building American AI Infrastructure, and Leading in AI Diplomacy and Security, and they call for fast private-sector buildout, reduced regulatory friction, and technology integration at a national scale.

The plan directs agencies to support private-sector R&D, cut red tape, modernize infrastructure procurement, and fast-track the development and export of U.S.-built AI systems. By directing the Federal Trade Commission (FTC) to prioritize innovation, the plan offers a historic opportunity to lift outdated regulatory burdens and realign competition policy with the realities of dynamic, technology-driven markets. 

Fulfilling the plan’s vision would require going further, including the Department of Justice (DOJ) with the FTC and encouraging the agencies to reevaluate the antitrust cases they have pursued. Since these cases were first brought, markets have evolved rapidly, with output, competition, and global rivals all expanding. The FTC and DOJ should review whether their actions remain consistent with the AI Action Plan, precedent, and the national interest.

Regulatory Drag Is Undermining the Plan’s Execution

Despite the Action Plan’s goals, current antitrust policy is moving in the opposite direction; slowing deals, increasing uncertainty, and deterring investment.

According to PwC, M&A value has been falling since the first half of 2023. These numbers have failed to rebound in 2025 to pre-2020 levels.

Regulatory huddles, such as the FTC’s updated Hart-Scott-Rodino (HSR) premerger notification rules added sweeping new filing requirements, continue to pose challenges. 

— According to the law firm Steptoe, these regulations “substantially increase the time, effort, and resources necessary to prepare a merger filing. For example, merging parties are now required to submit with their HSR filing narrative explanations of transaction rationale, strategic overlaps in products or supply chains, identities of key officers, directors, and additional information about certain minority investors, as well as top customer lists and other pertinent ordinary‑course documents.”

In tech, this translates to a direct threat to the many transactions that enable AI infrastructure, chip manufacturing, and system integration—the very foundation of the AI Action Plan.

— The App Association points out that without a coordinated, federal plan like the AI Action Plan, businesses would face an “uncertain environment” that would manifest in costs from “compliance burdens to lost opportunities for growth and innovation.”

The AI Action Plan calls for “fast-moving private investment and technology integration.” M&A is ultimately an important tool in bringing together complementary resources and capabilities to enable more rapid and effective innovation that certain companies can achieve alone. But regulatory posture now makes that harder, slower, and more uncertain. It sends the wrong signal to investors, founders, and engineers. It weakens the very innovation supply chain that the plan was built to empower.

The White House’s AI Action Plan doesn’t call for slowing down innovation. It calls for speeding it up—through scale, infrastructure, and private-sector execution. M&A is a core part of how that happens.