IBM Acquires Confluent for $11bn to Anchor Enterprise AI with Real-Time Data

IBM has announced a definitive agreement to acquire data streaming pioneer Confluent in a massive $11 billion all-cash transaction.

The deal, which will see IBM pay $31 per share for all issued and outstanding common shares, represents one of IBM’s largest acquisitions since its 2019 purchase of Red Hat, confirming the company’s aggressive strategy under CEO Arvind Krishna to focus on Hybrid Cloud and AI software.

Shares of Confluent soared approximately 29% in premarket trading on the news, reflecting the significant premium over its Friday closing price of $23.14. Conversely, IBM stock dipped about 1%, reflecting investor cautiousness regarding the size and cash component of the deal, though IBM expects the acquisition to be accretive to non-GAAP earnings in the first year and boost free cash flow in the second year after the anticipated mid-2026 closing.

The Central Nervous System for AI

The acquisition is a strategic move to secure the crucial real-time data backbone necessary to fuel the next wave of enterprise AI, particularly Generative AI (GenAI) and Agentic AI. Confluent, founded by the creators of Apache Kafka, offers the leading platform for “data in motion,” turning vast streams of continuous data—such as payment transactions, IoT signals, and application events—into immediately usable intelligence.

IBM CEO Arvind Krishna emphasized that the combined entity “will provide the smart data platform for enterprise IT, purpose-built for AI,” and will “enable enterprises to deploy generative and agentic AI better and faster by providing trusted communication and data flow between environments, applications and APIs.”

As global enterprise data is projected to more than double by 2028, modern AI applications cannot rely on slow, historical batch processing; they require low-latency, contextualized data to make instant decisions. Confluent provides this foundational layer, which is essential for:

• Generative AI (GenAI) Trust: Integrating Confluent’s real-time data flow is critical for Retrieval-Augmented Generation (RAG) architectures. It prevents AI “hallucinations” by feeding Large Language Models (LLMs) the most current enterprise context, thereby ensuring that AI-driven responses and applications are reliable and based on the latest available information.
• Agentic AI Enablement: Confluent’s platform is the engine for Agentic AI, allowing autonomous software agents to access, process, and share real-time event data instantly to coordinate actions, such as automated fraud detection or dynamic supply chain re-routing.

Technology and Market Integration

Confluent’s platform, which has an annual revenue run rate topping $1 billion, has deep enterprise penetration, serving more than 6,500 clients across finance, retail, and manufacturing. Its foundational technology, Apache Kafka, is an open-source, distributed event-streaming platform that functions as a highly scalable, fault-tolerant message bus and data storage layer.

The company offers multiple deployment options, including Confluent Cloud (fully managed across major public clouds like AWS, Google Cloud Platform, and Microsoft) and Confluent Platform (self-managed). This hybrid approach is a natural fit for IBM’s own Hybrid Cloud and AI strategy, allowing IBM to integrate Confluent’s streaming capabilities across its entire portfolio, including its watsonx AI platform and the offerings from its Red Hat division.

The acquisition follows IBM’s recent strategic moves to fill out its enterprise software stack, including the $6.4 billion cash acquisition of HashiCorp in 2024 and the $4.6 billion acquisition of Apptio in 2023.

Confluent’s largest shareholders and investors, who collectively hold approximately 62% of the voting power of outstanding common stock, have already entered into a voting agreement supporting the transaction, though regulatory approvals remain a condition for the deal’s completion.