IBM Snaps Up Confluent in an $11 Billion Deal to Supercharge AI Data Infrastructure

IBM Snaps Up Confluent in an $11 Billion Deal to Supercharge AI Data Infrastructure

• By John K. Waters
• December 08, 2025

IBM is acquiring data streaming leader Confluent for $11 billion in a bold move to bolster its AI infrastructure stack. The acquisition, revealed Monday, underscores IBM’s strategy to provide enterprise clients with robust, real-time data pipelines essential for generative AI and autonomous agents.

Confluent’s open-source platform, built on Apache Kafka, plays a pivotal role in enabling real-time data movement across hybrid and multi-cloud environments. The aim of the acquisition is to capitalize on surging enterprise demand for AI capabilities. With a $31 per share value, Confluent shares jumped almost 30 percent, with IBM stock also climbing marginally.

"IBM and Confluent together will enable enterprises to deploy generative and agentic AI better and faster by providing trusted communication and data flow between environments, applications, and APIs," said Arvind Krishna, IBM's chairman and chief executive, in a statement.

Strategic Rationale
The transaction continues IBM's acquisition-driven strategy to build out its cloud and software business. This high-margin area has become central to the company's growth plans under Krishna's leadership. IBM acquired cloud infrastructure firm HashiCorp for $6.4 billion last year and bought Red Hat for $34 billion in 2019, a deal analysts credit with revitalizing its cloud business.

Confluent reported cloud revenue of $161 million in its most recent quarter, up 24% from a year earlier, and has surpassed a $1 billion annual revenue run rate. The company serves more than 6,500 clients, including over 40% of the Fortune 500.

Jay Kreps, Confluent's co-founder and chief executive, said joining IBM would "accelerate our strategy with IBM's go-to-market expertise, global scale and extensive portfolio."

Growing Data Demands
Industry forecasts point to explosive growth in enterprise applications and data volumes. IDC estimates that more than one billion new applications will emerge by 2028, while global data volumes are expected to more than double during that period. The deployment of AI systems, particularly autonomous agents that make decisions and take actions, requires continuous access to real-time data streams across an organization's technology infrastructure.

Confluent's platform offers flexible deployment options, including fully managed cloud services, self-managed installations, and hybrid models. The technology connects disparate data sources and applications, providing what executives describe as a "central nervous system" for enterprise data.

Michael Ashley Schulman, chief investment officer at Running Point Capital, said IBM is acquiring "the critical data firehose that supports the AI hype," adding that the deal improves IBM's recurring revenue stream and strengthens its position with large enterprises.

Transaction Details
IBM will fund the acquisition with cash on hand. The company said the deal is expected to boost adjusted earnings before interest, taxes, depreciation and amortization within the first full year after closing and contribute to free cash flow in the second year.

Confluent's board and a special committee of independent directors have approved the transaction. Shareholders holding approximately 62% of Confluent's voting power have agreed to support the deal, which requires shareholder approval and regulatory clearances.

The companies expect the transaction to close by mid-2026. Until then, Confluent will continue operating independently. After closing, it will function as a distinct brand within IBM.

IBM said Confluent will complement its existing data and automation products, including its Red Hat portfolio, and enhance offerings across AI, consulting, and cloud services.

Confluent's stock has risen 44% since early October, when Reuters reported the company was exploring a sale after receiving acquisition interest.