IBM drops $11B on Confluent to feed next-gen AI ambitions

Steven

IBM drops $11B on Confluent to feed next-gen AI ambitions

Summary

IBM will acquire Confluent for $11bn in cash ($31 per share), buying a leading real-time data-streaming platform built on Apache Kafka. The purchase is framed as the cornerstone of a “smart data platform for enterprise IT” to move, govern and observe data across clouds, data centres and legacy estates so generative and agentic AI can be fed reliably.

IBM says the deal will be accretive to adjusted EBITDA in the first full year and lift free cash flow in the second. Boards of both companies have approved and major shareholders controlling roughly 62% of voting power back the sale. The transaction is expected to close by mid-2026, subject to regulatory and remaining shareholder approvals.

Key Points

  • Deal size: $11bn cash acquisition, $31 per Confluent share.
  • Strategic aim: give IBM a real-time data-streaming backbone (Confluent/Kafka) to feed, govern and connect data for next‑generation AI and autonomous agents.
  • Confluent footprint: more than 6,500 customers, including over 40% of the Fortune 500; Confluent claims an addressable market now around $100bn.
  • Products & deployment: Confluent Cloud (managed), self‑managed Confluent Platform, WarpStream hybrid and private‑cloud options for on‑prem Kafka.
  • Financials & timing: IBM expects EBITDA accretion in year one and FCF improvement in year two; financing from cash on hand; close targeted mid‑2026.
  • Governance: boards approved and major shareholders agreed; regulatory sign‑off and minority shareholder votes still required.
  • Risks: integrating a fast‑moving streaming specialist with an established 113‑year‑old company poses cultural, execution and regulatory challenges despite projected synergies.

Context and relevance

The deal fills a key gap in IBM’s AI stack: governed, low-latency data in motion. As organisations race to prepare data for generative models and autonomous software agents, the ability to move and govern streaming data across hybrid estates is increasingly strategic.

This acquisition complements prior IBM moves (for example Red Hat and HashiCorp) and signals that incumbent vendors are investing heavily in data‑movement infrastructure to compete with hyperscalers and specialist AI-platform providers.

Why should I read this?

Quick and blunt: this is a big play. If you work with enterprise AI, data architecture or cloud strategy, this tells you who just bought a critical piece of the plumbing that future AI systems will rely on — and why IBM thinks that plumbing will decide winners and losers. Saved you a deep dive; read the detail if you build or buy data platforms.

Source

Source: https://go.theregister.com/feed/www.theregister.com/2025/12/08/ibm_drops_11b_on_confluent/