IBM Buys Confluent for $9.3 Billion to Dominate Real-Time AI

IBM Buys Confluent : In one of its biggest strategic bets since buying Red Hat, International Business Machines Corp. (IBM) has agreed to acquire data-streaming giant Confluent Inc. for $9.3 billion, marking a major push to strengthen IBM’s real-time AI capabilities.

IBM will pay $31 per share, valuing the deal at $11 billion including debt, according to a joint announcement on Monday. The acquisition is expected to close by mid-2026. If the agreement collapses, IBM will pay Confluent a $453.6 million breakup fee.

A Big Boost for IBM’s AI Engine

Industry analysts say the deal could dramatically accelerate IBM’s AI roadmap. This acquisition could significantly improve IBM’s AI portfolio and boost software revenue growth,” Bloomberg Intelligence noted. Following the news, Confluent shares surged 29%, while IBM jumped 2.4% in early trading.

Why Confluent Matters in the AI Race

The global AI boom has triggered billions in investments across data centers, cloud infrastructure, AI model developers and real-time data platforms. Confluent, based in Mountain View, California, sits at the heart of the data layer that AI systems depend on.

Unlike traditional databases that move information in fixed batches, Confluent’s platform streams live data enabling companies to power AI tools that react instantly.

Companies like

• Michelin use Confluent to optimize inventory in real time.
• Instacart relies on Confluent for fraud detection and up-to-the-second product availability.
  
  

As businesses turn to real-time AI automation, platforms like Confluent have become indispensable.

IBM’s Reinvention Continues
Under CEO Arvind Krishna, IBM has been aggressively reshaping itself around AI. Nearly half of IBM’s revenue now comes from software — a number that has steadily risen as the company moves away from its hardware-heavy past.

The Confluent deal would be IBM’s largest purchase since it bought Red Hat for $34 billion in 2019. It also follows IBM’s $6.4 billion acquisition of HashiCorp earlier this year.

A Different Kind of AI Mega-Deal

Recent AI megadeals have focused heavily on infrastructure, including

• BlackRock’s $40 billion acquisition of Aligned Data Centers
• Oracle’s 4.5 GW compute deal with OpenAI, valued at up to $300 billion
  
  Confluent, however, represents a software-layer play — giving IBM deeper control over the real-time data pipelines that modern AI systems require.

From LinkedIn Roots to $9.3 Billion Exit

Founded in 2014 by ex-LinkedIn engineers, including current CEO Jay Kreps, Confluent went public in 2021 and reached a peak of nearly $95 per share. Before the acquisition buzz, the stock had fallen 17% year-to-date. IBM was advised by Barclays, Centerview Partners and JPMorgan Chase, while Morgan Stanley advised Confluent. The acquisition builds on an existing 5-year partnership between the two companies.

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