IBM accelerates cloud drive with US$11 billion Confluent deal as AI demand booms

Confluent provides technology needed to manage massive, real-time data streams for artificial intelligence models

IBM said on Monday (Dec 8) it will buy data infrastructure company Confluent in a deal valued at US$11 billion, ramping up its cloud-computing offerings to capitalise on an AI-driven demand boom.

Big Blue, under CEO Arvind Krishna, has doubled down on M&As to beef up its cloud and software business – a high-growth, high-margin area – as customers invest to upgrade their digital infrastructure to house complex artificial intelligence applications.

Mountain View, California-based Confluent provides technology needed to manage massive, real-time data streams for artificial intelligence models.

“IBM and Confluent together will enable enterprises to deploy generative and agentic AI better and faster,” Krishna said in a statement.

“With the acquisition of Confluent, IBM will provide the smart data platform for enterprise IT, purpose-built for AI.”

The offer price of US$31 per share represents a premium of around 34% to Confluent’s last close. Confluent’s shares surged nearly 30% in premarket trading, while IBM fell more than 2%.

The Confluent stock is up nearly 44% since October 7, the last trading session before Reuters reported that the company was exploring a sale after attracting acquisition interest.

IBM has long turned to deal-making to gain scale and fend off competition, especially in cloud computing.

In April last year, the company bought cloud firm HashiCorp in a deal valued at US$6.4 billion. Its US$34 billion deal for Red Hat in 2019 is credited by analysts as the central catalyst that boosted its cloud business.

SEE ALSO

IBM will fund the Confluent deal with cash on hand and the transaction is expected to close by the middle of 2026.

The deal is expected to boost IBM’s adjusted core earnings within the first full year of the transaction’s completion and it will add to free cash flow in year two. REUTERS

Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.