IBM has cracked open its wallet again, agreeing to shell out $11 billion for Confluent in a bid to glue together the data sprawl underpinning the next wave of enterprise AI.
The deal, announced Monday and just weeks after IBM laid off thousands, hands IBM a heavyweight in real-time data streaming as Big Blue bets that future generative and agentic AI systems will live or die on how well they can move and govern data across clouds, data centers, and legacy estates.
IBM will pay $31 a share in cash for Confluent, whose Kafka-based platform has become a staple for organizations trying to pipe clean, consistent, and reusable data into applications and analytics engines.
Arvind Krishna, IBM CEO, pitched the purchase as the cornerstone of a “smart data platform for enterprise IT, purpose-built for AI,” enabling “trusted communication and data flow between environments, applications, and APIs.”
Confluent has spent the past decade turning Apache Kafka into an enterprise-grade nervous system for data in motion. Jay Kreps, the company’s CEO and co-founder, claimed it has helped customers “unlock the full potential of their data” in an increasingly messy IT landscape and cast the sale as a way to move faster by using IBM’s global footprint.
The timing suits both sides. Confluent claims its addressable market has doubled to $100 billion since 2021, propelled by organizations scrambling to ready data for generative models and autonomous software agents. IBM, meanwhile, has been stitching together pieces of an AI-first stack that spans infrastructure software, automation, consulting, and an expanding open-source portfolio. The deal will also complement IBM’s existing Data and Automation portfolio, joining prior buys such as Red Hat and HashiCorp.
Financially, IBM insists the numbers work. The company expects the purchase to be accretive to adjusted EBITDA within the first full year of closing and to lift free cash flow in its second year. It also flagged the usual synergy wishlist and touted “significant operational efficiencies” as Confluent scales under its umbrella.
For Confluent’s customer base, which includes more than 6,500 organizations and over 40 percent of the Fortune 500, the product portfolio remains the real draw. The company offers a spread of deployment models, from its fully managed Confluent Cloud and its self-managed Confluent Platform to the hybrid WarpStream and the private-cloud flavor designed for on-prem Apache Kafka workloads. All center on the same promise: keep data fast, clean, and connected for real-time processing.
The companies said the acquisition will give enterprises a more integrated route to feed AI agents, analytics systems, and hybrid-cloud applications with the kind of governance, observability, and resilience those systems demand. IBM will finance the purchase with cash on hand, and the boards of both companies have signed off. Confluent’s largest shareholders, controlling about 62 percent of the voting power, have already agreed to back the deal.
Regulators and the remaining shareholders still need to weigh in, but IBM expects the transaction to close by mid-2026. After that, it will be up to Big Blue to prove that welding a fast-moving data-streaming specialist onto a 113-year-old giant can produce more than just another layer in the stack. ®