The technology sector is at the forefront of transformation. Breakthroughs in AI. More robust, mature data security models. Evolving global compliance frameworks. Software companies, IT service organizations, and tech startups are embracing emerging technology trends to keep up with the rapid pace of innovation and tackle industry challenges. Dive into six key trends that will shape the global tech industry in 2026.
- AI governance
- The battle for global market share
- The tech talent gap
- Data security and privacy
- Competition in tech M&A
- A complex tax compliance landscape
1. AI governance
Tech companies are at the forefront of using artificial intelligence (AI) to streamline operations, save costs, and scale their business. From trained AI models and packaged AI solutions to the AI that’s integrated into your existing systems (e.g., audio transcriptions or email summaries), it’s everywhere. Looking ahead to 2026, use cases continue to get more sophisticated and specialized, but it’s the AI embedded into our everyday software that often gets overlooked — and hence poses the greatest risk to your company without proper governance.
A comprehensive, robust AI governance framework reviews AI use across your organization and establishes best practices around its use to protect your data security. Effective governance can help you harness the benefits while minimizing the risks of AI — helping you make the most of your AI investments and stay competitive in a rapidly evolving landscape.
Your AI governance framework should include:
- An up-to-date acceptable use policy. As your organization expands its AI toolkit, so should your policies around its use. Ensure you regularly update your acceptable use policies and train your staff on any changes.
- A center of excellence. By bringing together a team across business units to intentionally review your AI strategy, you’ll empower your staff to identify and adopt the right AI opportunities for your organization. Establishing a center of excellence can help you look at the bigger picture and bring your AI use cases to life.
- A human-in-the-loop approach. Lastly, taking a human-in-the-loop approach to your AI is critical. Are you regularly reviewing your outputs for accuracy? Make sure your users are familiar with the technologies and best practices for verifying results.
In the race to AI adoption, don’t underestimate having a good foundation — building out the proper infrastructure and protocols within your organization to support your AI is a critical determinant of your future success.
2. The battle for global market share
International expansion opens the door for tech companies to access new markets, customer bases, and talent abroad. But the road to enter global markets can be complex. The globalization of the tech industry has occurred in tandem with the rise of Big Tech. Through strategic investments, acquisitions, and partnerships, Big Tech has established extensive infrastructures, such as data centers and cloud services, that support international operations and enable seamless connectivity and data exchange across borders. Tech startups and middle-market tech companies have had to scale and adapt to the globalization strategies of Big Tech or risk being outpaced by competitors. This has shaped the global technology industry into a fiercely competitive landscape, with Big Tech, emerging startups, and middle-market players vying for dominance.
In addition to chasing market share from Big Tech, tech businesses encounter diverse regulatory environments and local market dynamics as they attempt to enter global markets. Each country has unique regulations regarding data privacy, cybersecurity, and consumer protection, which means you’ll need to adapt your strategies and operations to meet local legal requirements. An incomplete expansion strategy that fails to consider these elements can challenge your ability to access new markets and increase the operational costs of establishing local infrastructure. In contrast, a successful global expansion strategy should incorporate a detailed market analysis, identify supply chain and sourcing opportunities, and assess the local tax landscape, such as rates and regulations.
For middle-market tech leaders, performing a market analysis and developing a comprehensive entry strategy are critical elements to identify the viability of pursuing expansion. The right global expansion partner can help you navigate these complexities.
3. The tech talent gap
Identifying and retaining the right talent is equally critical for tech companies entering new markets. Tech companies are notoriously asset-light — and the lack of expertise and capacity can hamper due diligence processes and market entry as you pursue expansion goals. Seeking talent abroad can fill this gap.
If you’re hiring employees abroad, you need a comprehensive hiring infrastructure that’s compliant with local regulations and possesses the right business structure to support your goals. A Professional Employer Organization (PEO) is often used as a tool to minimize the challenges of hiring abroad by outsourcing payroll and compliance to a third-party entity. For others, hiring employees directly or as international contractors can be more favorable depending on your business needs, employment laws of the target market, and cost considerations.
Ultimately, tech companies need to ask themselves if they’ve identified the right infrastructure in place to support hiring abroad. Without it, companies could expose themselves to noncompliance and further delay expansion efforts.
4. Data security and privacy
It’s no surprise that data privacy concerns will remain a key focus area for tech in 2026. Whether you’re providing Software as a Service (SaaS) solutions or managing a company’s IT infrastructure, you likely process vast amounts of customer data and know it better than anyone. But a data breach can irreparably damage your reputation and cost your organization its users and business. Pursuing compliance best practices with local and global regulations, investing in data protection measures, and establishing companywide data governance policies is critical.
In the United States, SOC reporting has become the gold standard for companies looking to strengthen their internal control structure and security compliance posture. A SOC report can strengthen trust with customers by providing a third-party assessment of the risks associated with using an organization, such as a SaaS, third-party administrator, or payroll processor.
Tech companies with operations in the European Union (EU), or that process data of individuals in the EU, should ensure their business is compliant with General Data Protection Regulation (GDPR) standards. GDPR establishes requirements on how companies should process, store, and transfer data of EU individuals. Failure to comply can risk more than your reputation — it can mean hefty fines depending on the severity of the violation.
5. Competition in tech M&A
The technology industry offers investors a lucrative and attractive opportunity to earn high returns and diversify one’s portfolio.
When you’re considering a sale, a high and accurate valuation is crucial to position your tech business for success. From financial performance and market position to operational efficiency and internal controls, there are a host of considerations to consider before you get to the deal table.
But the tech industry is particularly challenged by a volatile and highly competitive market, which complicates the ability for organizations to define their competitive advantage and growth potential to investors. And if you’re pursuing a cross-border M&A, the complexity rises — your process abroad may look different from what you’ve previously pursued in the United States. Executing a proof of concept in international markets can be a valuable first step prior to entering a market transaction internationally. And as you move deeper into the deal cycle, performing proper due diligence across your financial, accounting, and tax structures is equally critical.
Ultimately, a deliberate, thoughtful approach to the sale with a buy-side perspective via a thorough due diligence checklist or more targeted assessments can help you avoid seller risks and support your value creation plan.
6. A complex tax compliance landscape
Whether your tech company has established operations internationally or is exploring new domestic markets, there are important tax implications you should consider. Evolving tax policy changes, shaped by new tax credits and incentives, changing tax rates, and legislation, forms a complex, dynamic landscape. A proactive tax strategy is critical. Here are our top questions to secure your tax position in 2026.
- Have you reviewed your business activities for permanent establishment risk? If you think your business may have a permanent establishment (PE), ensuring you’re in compliance with local tax rules is critical. Avoid the tax and legal implications of a PE by regularly reviewing your business activities in foreign countries, including business transactions, employee presence, and physical presence.
- Are you monitoring your nexus footprint? The tech industry is known for its distributed workforces, allowing access to wider, global talent pools and offering flexibility to staff via remote positions. However, remote workers can constitute a nexus for business taxes, so monitoring your state filing footprint is crucial. Online sales, inventory, and business partnerships in other states can also place tax obligations on your organization — which is why a proactive approach to navigating state-specific tax rules is key.
- Have you taken advantage of R&D tax credits? A critical part of staying ahead of the innovation curve is investing in research and development (R&D) of your product or service. If your company invests in R&D in the United States, you may be eligible for a tax credit on qualified research expenses. Additionally, make sure you’re up to date on the domestic R&E capitalization requirements under Section 174, which were significantly changed by the enactment of the One, Big, Beautiful Bill in July 2025. However, foreign R&E costs were excluded from the OBBB changes and continue to be subject to a 15-year amortization period.
- Are you in compliance with transfer pricing rules? Tech companies need to ensure accurate transfer pricing and compliance with tax authorities as they enter new markets locally and abroad. Tech is particularly challenged by intellectual property (IP) complexities in transfer pricing, which can be difficult to price depending on the nature of the transaction and location of the IP. As you pursue international markets, it’s critical that your expansion strategy aligns with your transfer pricing strategy to avoid excessive costs or penalties.
- Have you identified Inflation Reduction Act tax credit opportunities? While the One, Big, Beautiful Bill introduced sweeping changes to certain IRA energy tax credits, opportunities still exist for taxpayers to take advantage of available credits. Tech companies, particularly those in the cleantech sector have an opportunity to reduce their tax exposure as well as operational costs through investment in sustainable technologies via Inflation Reduction Act (IRA) tax credits. Review the available tax credits and incentives afforded by the IRA here.
The global tech landscape is unpredictable, but two things are certain: disruption and evolution. As you look to scale your business, ensure your expansion strategy is holistic and mindful of emerging challenges and opportunities in the tech industry. Getting ahead of the top trends in the technology industry can position your business for success and growth in 2026.
