IBM has AI on its mind with plans to acquire Confluent, the data-streaming firm built on Apache Kafka, in a deal valued at $11 billion.
The agreement, announced today (Dec. 8) will see IBM purchase all outstanding Confluent shares at $31 per share, bringing under its wing a platform used by thousands of organizations to move, process, and govern data in real time.
The move reflects a rapidly intensifying race among technology giants to strengthen the data foundations required for generative and agentic AI. With IDC projecting more than one billion new logical applications emerging by 2028, enterprises are facing enormous pressure to unify data scattered across hybrid environments. Real-time data availability is increasingly viewed as essential for AI systems that must act autonomously, respond reliably, and integrate across legacy and cloud-native architectures.
In the announcement, IBM CEO Arvind Krishna framed the deal as a strategic leap toward building what the company calls a smart data platform for enterprise AI. “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,” Krishna said. “With the acquisition of Confluent, IBM will provide the smart data platform for enterprise IT, purpose-built for AI.”
Why Confluent matters
Confluent, founded by the original creators of Kafka, is a platform used for streaming data across industries. IBM says it provides tools to ensure that data remains clean, connected, and reliable as it flows across applications—conditions that are increasingly critical for AI models whose performance depends on up-to-date and trustworthy information.
The company’s market has expanded in recent years, with its total addressable market doubling from $50 billion in 2021 to $100 billion in 2025.
For IBM, the acquisition expands its existing hybrid-cloud and automation offerings, including its AI infrastructure stack and Red Hat ecosystem. It also deepens IBM’s commitment to open-source technologies, following earlier high-profile purchases of Red Hat and HashiCorp.
Enterprise AI and hybrid cloud
The deal points to a broader shift across the enterprise technology landscape: AI cannot function at scale without a modern data architecture capable of delivering continuous, real-time insights. Confluent’s streaming capabilities allow organizations to break down data silos—one of the most persistent challenges in deploying AI agents across business units.
By integrating Confluent directly into its portfolio, IBM aims to position itself as a provider of end-to-end pipelines that unite data management, analytics, and AI into a single operational flow. This could reduce complexity for customers that currently rely on patchwork combinations of cloud services, data brokers, and legacy repositories.
The acquisition also signals how competitive the AI infrastructure market has become. Companies like Amazon, Google, Microsoft, Snowflake, and Databricks are similarly building or acquiring technologies to manage high-velocity data. IBM’s decision suggests it sees real-time data streaming not just as a complementary tool, but as a core requirement for future enterprise systems.
Financial expectations
IBM expects the transaction to improve adjusted EBITDA within the first full year after closing and to become free cash flow accretive in year two. Confluent’s largest shareholders, representing about 62 percent of voting power, have already agreed to vote in favor of the deal—a significant step toward clearing the regulatory approval process.
The purchase will be funded with IBM’s available cash. Both companies’ boards have approved the agreement, and the transaction is expected to close by mid-2026, pending shareholder and regulatory review.
If completed, the acquisition would add Confluent’s more than 6,500 customers—including over 40 percent of the Fortune 500—to IBM’s client base. The companies also share partnerships across major technology ecosystems such as Anthropic, AWS, Google Cloud, Microsoft, and Snowflake, aligning with IBM’s stated strategy of maintaining an open, multi-cloud approach.
What comes next
Confluent’s portfolio spans fully managed cloud offerings, self-managed platforms, hybrid deployment models, and private cloud services—capabilities that IBM is likely to integrate into its own data fabric and AI governance tools. Industry observers will watch to see how IBM balances Confluent’s open-source roots with its enterprise-grade product strategy.
If the integration succeeds, IBM could emerge with one of the most comprehensive data platforms tailored for large-scale AI adoption. The deal also underscores the growing realization among enterprises: AI value is unlocked not only by powerful models, but by the quality, connectivity, and timeliness of the data feeding them.
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