IBM in Talks to Buy Confluent for $11 Bn in Cloud, AI Push: Report

IBM is close to finalising a roughly $11 billion acquisition of data-infrastructure firm Confluent, according to a Wall Street Journal report, in what would be the tech giant’s biggest bet yet to strengthen its cloud software and AI ambitions.

The deal, which could be announced on December 8, the report noted, would give IBM control of Confluent, a widely adopted real-time data streaming platform that enables organisations to build, manage, and operate real-time data streaming applications at scale. Built on the open-source streaming platform Apache Kafka, companies across sectors use Confluent’s platform to process everything from bank transactions to website clicks.

The company’s latest offering, Confluent Intelligence, aims to help enterprises build and scale context-rich and real-time AI systems.

AIM reached out to Confluent but did not receive a response at the time of publishing.

The potential takeover comes at a pivotal moment for IBM, which is under investor pressure to reinvigorate growth in its cloud software division. Despite IBM posting a 9% year-on-year growth in its topline in its third quarter, its stock slipped 6% on extended trading following the earnings results as investors grew wary about slowing momentum in core cloud offerings, raising concerns over its long-term trajectory. 

Confluent, valued at about $8.09 billion, has been exploring a sale and has hired an investment bank to manage the process after receiving interest from potential buyers, according to a Reuters report.

IBM, meanwhile, holds a market capitalisation of roughly $287.84 billion.

A successful acquisition would extend IBM’s M&A strategy under CEO Arvind Krishna, who has sharpened the company’s focus on cloud and software. 

Last year, IBM acquired HashiCorp in a $6.4-billion deal aimed at expanding its cloud-native and automation capabilities amid rising enterprise spending on AI.

The interest in Confluent underlines the accelerating demand for data infrastructure platforms as companies race to build and deploy generative AI systems. In a similar move earlier this year, Salesforce agreed to buy Informatica for about $8 billion to enhance its AI-driven data stack.

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