IBM Close to $11 Billion Deal to Acquire Confluent, Reports Say, as Big Blue Confirms Takeover for AI Data Push

Published December 8, 2025

International Business Machines Corp. (IBM) is moving ahead with one of its largest software deals in years, agreeing to acquire data-streaming specialist Confluent in an all‑cash transaction valued at about $11 billion, following a wave of reports that it was “close to a deal” over the weekend. ^[1]

The purchase, priced at $31 per share in cash, gives IBM control of one of the leading platforms for real‑time data streaming—technology increasingly viewed as critical infrastructure for enterprise AI and cloud applications. ^[2]

From “close to a deal” to signed agreement

On Sunday, The Wall Street Journal and others reported that IBM was in advanced talks to buy Confluent for roughly $11 billion, citing people familiar with the matter and warning that talks could still collapse. ^[3]

Reuters echoed that IBM was negotiating to acquire Confluent for about $11 billion in a move aimed at boosting its cloud and AI capabilities, noting that Confluent’s platform processes massive streams of real‑time data such as bank transactions and web clicks. ^[4]
Pre‑market on Monday, Confluent shares jumped more than 20–25% after the reports, while IBM slipped modestly, reflecting investor enthusiasm for Confluent’s premium takeout and some concern about IBM’s spending. ^[5]

By Monday, December 8, the story had moved from rumor to reality. IBM and Confluent jointly announced they had entered into a definitive agreement for IBM to acquire all outstanding Confluent shares for $31 per share, implying a total enterprise value of $11 billion, funded entirely with IBM’s cash on hand. ^[6]

The deal is expected to close by mid‑2026, subject to regulatory approvals and a shareholder vote. Shareholders controlling roughly 62% of Confluent’s voting power have already agreed to support the transaction, significantly reducing deal‑completion risk. ^[7]

Key terms of the IBM–Confluent acquisition

According to IBM’s announcement and subsequent reporting, the transaction features several notable elements: ^[8]

Price and premium
- $31 per share in cash, valuing Confluent at about $11 billion.
- Represents roughly a 36–50% premium over recent trading levels and around 50% above where the stock traded before sale rumors surfaced in early October. ^[9]
Financing
- IBM will fund the deal with existing cash, avoiding new debt issuance. ^[10]
Financial impact
- IBM expects the acquisition to be accretive to adjusted EBITDA in the first full year after closing, and to free cash flow in year two. ^[11]
Approvals and closing timeline
- Approved by both companies’ boards and a special committee at Confluent.
- Requires Confluent shareholder approval and a range of regulatory clearances.
- Targeted closing by mid‑2026, assuming no major regulatory setbacks. ^[12]

Why IBM wants Confluent: real‑time data for generative and agentic AI

IBM is positioning the deal squarely as a bet on data infrastructure for AI. In the announcement, CEO Arvind Krishna described Confluent as a foundation for a “smart data platform” that will power generative and agentic AI by providing trusted, real‑time data flow between applications, APIs and environments. ^[13]

Filling a key gap in IBM’s AI and cloud stack

IBM has spent the last several years re‑orienting around hybrid cloud and AI, anchored by its Red Hat acquisition in 2019 and more recently the HashiCorp deal announced in 2024 and completed in early 2025. ^[14]

Red Hat gave IBM a powerful hybrid cloud platform.
HashiCorp added infrastructure automation and security across multi‑cloud environments.
Confluent now provides the data streaming backbone that feeds those environments with real‑time, governed data.

Analysts note that this combination helps IBM compete more directly with cloud and data-platform rivals like Snowflake, Databricks, AWS, Microsoft and Google, all of which emphasize AI‑ready data services. Confluent positions itself as the “central nervous system” for enterprise data, a metaphor IBM appears keen to extend across its portfolio. ^[15]

A $100 billion+ data streaming opportunity

Confluent and IBM highlight a rapidly expanding market for streaming data:

Confluent estimates its total addressable market has doubled in four years to around $100 billion in 2025. ^[16]
IDC, cited in IBM’s release, projects more than one billion new logical applications by 2028, many of them requiring low‑latency, event‑driven data flows to power AI agents and digital experiences. ^[17]

For IBM, owning the data streaming layer means its watsonx AI platform, automation tools and consulting servicescan tap directly into fresh, contextual data, rather than relying on static warehouses or batch pipelines.

What Confluent brings: Kafka roots, big customers and $1B+ in revenue

Confluent was founded by the creators of Apache Kafka, the open‑source project that has become a de facto standard for streaming “data in motion” across large enterprises. ^[18]

Product portfolio

Confluent offers a comprehensive data‑streaming platform built on Kafka, including: ^[19]

Confluent Cloud – fully managed Kafka in the public cloud.
Confluent Platform – self‑managed, enterprise‑grade Kafka distribution.
WarpStream and Confluent Private Cloud – hybrid and private deployment options for regulated or sovereignty‑sensitive workloads.
Higher‑level services like Stream Governance, Stream Processing, Tableflow, Confluent Intelligence and Streaming Agents designed to keep data clean, connected and ready for AI use cases.

Customer base and scale

IBM’s release underscores that Confluent: ^[20]

Serves more than 6,500 customers globally.
Counts over 40% of the Fortune 500 as customers.
Integrates widely with partners such as Anthropic, AWS, Google Cloud, Microsoft and Snowflake, reflecting a cloud‑agnostic strategy.

Financially, Confluent has already crossed the $1 billion annual revenue run‑rate:

2024 revenue was around $964 million, up roughly 24% year‑on‑year. ^[21]
Trailing‑twelve‑month revenue in 2025 is estimated at about $1.1 billion. ^[22]

Confluent’s cloud offerings now account for more than half of total revenue and are growing faster than the rest of the business, a key attraction for IBM as it seeks higher‑margin, recurring software revenue. ^[23]

Market reaction: Confluent soars, IBM pulls back

News of the talks and then the definitive agreement triggered a sharp reaction in both stocks:

Confluent (CFLT)
- After the initial WSJ report, Confluent’s shares surged more than 20% in after‑hours trading and later jumped roughly 25–28% in early Monday trading, as investors priced in the takeover premium. ^[24]
IBM (IBM)
- IBM’s shares were slightly lower to down a couple of percent on the announcement, as markets weighed the strategic benefits against the cost of the deal and integration risk. ^[25]

Some analysts, such as those cited by Investing.com and other outlets, have reiterated “Outperform” or equivalent positive ratings on IBM, arguing that while the near‑term financial impact is modest, the acquisition strengthens IBM’s long‑term AI and software positioning. ^[26]

For Confluent shareholders, the deal provides a significant premium after a volatile period in which the stock had fallen double digits year‑to‑date before the acquisition talk surfaced. ^[27]

How the deal reshapes the AI and data‑streaming landscape

Commentary from industry analysts and tech strategists paints the IBM–Confluent tie‑up as a high‑stakes but logical move in the AI arms race.

Strengthening IBM’s AI data story

Constellation Research notes that Confluent gives IBM: ^[28]

A governed, real‑time data platform feeding AI agents and analytics.
A new growth engine aligned with high‑value software and hybrid cloud.
A counterpart to integration platforms like MuleSoft or Informatica in rival ecosystems, but embedded directly into IBM’s stack.

Stock‑focused analysis highlights that Confluent’s business is still delivering double‑digit revenue growth, expanding margins, and strong large‑customer adoption, even as the broader software sector grapples with AI valuation fatigue. ^[29]

Competitive pressure on cloud and data rivals

Confluent already competes with:

Native streaming services from AWS (Kinesis), Azure Event Hubs and Google Pub/Sub.
Data‑platform players like Snowflake and Databricks, which are building their own real‑time capabilities. ^[30]

By placing Confluent inside IBM, the combined company can pitch an end‑to‑end AI and data platform: infrastructure automation (HashiCorp), hybrid cloud (Red Hat), AI & data services (watsonx, Data & AI portfolio) and now a dedicated streaming layer. Analysts suggest this may pressure rivals to deepen their own streaming and integration capabilities via partnerships or acquisitions. ^[31]

Regulatory and integration risks

Despite strong strategic alignment, the transaction faces the usual hurdles:

Regulatory review – Authorities in the U.S. and other jurisdictions will examine the impact on competition in data infrastructure and cloud markets. IBM emphasizes that Confluent remains strongly multi‑cloud and highly integrated with other vendors, which may help ease concerns. ^[32]
Execution risk – Integrating a fast‑growing, developer‑centric software company into a century‑old tech giant is non‑trivial. Observers will watch whether IBM can preserve Confluent’s pace of innovation and open‑source credibility while extracting the synergies it has promised. ^[33]

IBM’s own forward‑looking statements caution that there is no guarantee the transaction will be consummated, citing potential shareholder, regulatory, competitive and litigation risks—standard language for large deals in this space. ^[34]

What to watch next

Over the coming months, several milestones will shape the IBM–Confluent story:

Proxy statement and shareholder vote
- Confluent will file a proxy statement with the U.S. SEC and call a special shareholder meeting to approve the deal. ^[35]
Regulatory decisions
- Competition and foreign‑investment regulators will review the transaction, with particular attention to cloud and AI infrastructure markets.
Product roadmap and branding
- IBM is expected to outline how Confluent will be integrated with watsonx, its Data & AI portfolio and Red Hat OpenShift, and whether the Confluent brand remains prominent.
Rival responses
- Competitors in cloud, streaming and AI platforms may respond with new partnerships, pricing moves or acquisitions of their own.

For now, the market is treating the acquisition as a vote of confidence in real‑time data streaming as a pillar of enterprise AI, and as a signal that IBM is willing to deploy meaningful capital to stay competitive in the next wave of cloud and AI infrastructure.