IBM has announced it will acquire data infrastructure firm Confluent in a deal worth $11 billion, marking one of its most significant moves yet to strengthen its cloud and artificial intelligence capabilities. The agreement, revealed on 8 December, comes as global demand for AI-ready digital infrastructure continues to accelerate.
Under CEO Arvind Krishna, IBM has been investing heavily in cloud and software acquisitions as clients overhaul their systems to support increasingly complex AI applications. Confluent, headquartered in Mountain View, California, provides technology that helps organisations manage large, real-time data streams, an essential component for training and operating modern AI models.
“IBM and Confluent together will enable enterprises to deploy generative and agentic AI better and faster,” Krishna said. “With the acquisition of Confluent, IBM will provide the smart data platform for enterprise IT, purpose-built for AI.”
The companies began early discussions in the summer, building on their existing partnership, according to a source familiar with the negotiations. Confluent subsequently launched a formal auction process, though IBM emerged as the successful bidder. As part of the agreement, Confluent CEO and co-founder Jay Kreps will join IBM Software and report to Rob Thomas.
Centerview acted as adviser to IBM, while Morgan Stanley advised Confluent. Cooley served as Confluent’s legal counsel and Paul Weiss advised IBM. IBM will fund the deal using cash on hand, and the transaction is expected to be completed by mid-2026.
The offer price of $31 per share represents a 34% premium to Confluent’s last closing price. Following the announcement, Confluent’s shares rose nearly 30%, while IBM’s share price saw a modest increase. Confluent’s stock has climbed almost 44% since 7 October, when Reuters first reported that the company was exploring a potential sale.
Analysts see the move as another step in IBM’s strategy to expand recurring revenue and strengthen its foothold in enterprise AI. “IBM is buying the critical data firehose that supports the AI hype,” said Michael Ashley Schulman, chief investment officer at Running Point Capital. “With this purchase, IBM improves … recurring revenue, tightening its grip on large enterprises.”
The acquisition extends IBM’s recent string of cloud-focused deals. Last year, the company bought HashiCorp for $6.4 billion, while its 2019 purchase of Red Hat for $34 billion remains one of the defining moments in its cloud transformation. IBM expects the Confluent deal to boost adjusted core earnings within the first full year after completion and add to free cash flow in year two.
