IBM eyes $11B Confluent acquisition to boost cloud AI

IBM is set to acquire data-infrastructure company Confluent for about $11 billion in an effort to boost artificial intelligence cloud services.

As reported by the Wall Street Journal, the American multinational tech company is in advanced talks, so the Big Blue can cater to the growing demands for cloud computing.

The deal’s confirmation to acquire Confluent, an IT company known for offering massive streams of real-time data, could be announced soon.

Both companies have not yet commented on the potential buyout.

Following the news, the stocks of Confluent soared to 20% to 28% in after-hours trading.

According to Reuters, Confluent since October has been considering a potential sale and has approached an investment bank to supervise the acquisition process.

IBM’s reported sluggish growth in cloud software business in October could be the main reason behind acquiring Confluent to maintain its credibility and growth as investors believe that only robust software performance can keep its overall growth on track.

IBM’s acquisition strategy is important for meeting investors’ expectations. In 2024, the company paid $6.4 billion for HashiCorp, uplifting its cloud-based services to capitalize on demands driven by the AI boom.

The recent acquisition move also highlights a surging demand for data infrastructure, prompted by the generative AI. In May, Salesforce entered the agreement to acquire software maker Informatica for $8 billion to reinforce its own AI capabilities.

According to LSEG-compiled data, New York-based IBM’s valuation is around $287.84 billion, while Confluent holds market share of about $8.09 billion.