A whopping $11 billion! IBM (IBM.US) acquires data streaming platform Confluent (CFLT.US) to enhance AI real-time data processing

The Zhitong Finance App learned that IBM (IBM.US) announced that it will acquire the data streaming platform Confluent (CFLT.US) with a total enterprise value of about 11 billion US dollars (including debt). The transaction consideration is 31 US dollars per share, corresponding to an equity value of about 9.3 billion US dollars. The acquisition is expected to be completed in mid-2026 and will be one of IBM's largest strategic investments to date to strengthen its enterprise-level software layout in the field of artificial intelligence real-time data processing.

As of press release, Confluent's pre-market share price jumped nearly 30% to $29.08, still slightly below the offer price of $31. Trading of the stock was soon suspended after the announcement; IBM's pre-market share price fell nearly 1%.

Currently, the AI boom has set off a wave of mergers and acquisitions, with data center developers, software manufacturers, generative AI tool developers, and data management companies all involved. Confluent, headquartered in Mountain View, California, is at the cutting edge of the “data field”. It provides a platform that enables real-time collection (i.e. streaming) and analysis of data, replacing traditional batch data processing methods.

With the help of the Confluent platform, well-known manufacturers such as Michelin were able to optimally manage the inventory of raw materials and semi-finished products in real time; Instacart relied on the platform to build a real-time anti-fraud system and achieve accurate visual control of grocery inventory. Today, more and more companies are starting to deploy AI systems that require real-time data flow support.

IBM, whose main business is the mainframe business, has been actively reshaping its business layout around the AI field in recent years. The company's CEO Arvind Krishna (Arvind Krishna) vigorously promoted the software asset acquisition strategy and actively sold generative AI services to enterprise customers. Today, software business revenue accounts for nearly half of the company's total revenue. Notably, this acquisition is the largest transaction since IBM spent approximately $34 billion to acquire cloud software company Red Hat (Red Hat) in 2019.

Unlike the recent wave of AI mergers and acquisitions in the industry that focus on data centers and computing power, IBM's acquisition of Confluent focuses on strengthening its capabilities in real-time data streaming software. According to reports, the deal was not achieved overnight, but was based on a five-year cooperation between the two parties. Prior to that, some IBM customers were already able to use Confluent's data streaming platform.

Prior to the disclosure of the takeover negotiations, Confluent's stock price had already shown a downward trend this year, with a cumulative decline of 17%. Compared with the high of $94.97 that it set after completing its initial public offering (IPO) in November 2021, the stock price showed a sharp discount.

It's worth mentioning that in February of this year, IBM just successfully completed the $6.4 billion acquisition of HashiCorp. Prior to that, IBM was also considering acquiring infrastructure software provider Informatica, but in the end Informatica was successfully incorporated by CRM.US (CRM.US).