Inside IBM’s Acquisition of Confluent for Enterprise AI

Enterprise technology companies are racing to build infrastructure for AI systems that require real-time access to data across distributed computing environments. 

The challenge has become pressing as organisations discover their data sits fragmented across multiple clouds, data centres and legacy systems.

IBM has now agreed to acquire Confluent, a data streaming platform provider, for US$11bn in cash. 

The deal brings together IBM’s hybrid cloud capabilities with Confluent’s expertise in moving data between systems as events happen, rather than in batches.

For IBM, the acquisition represents another step in its hybrid cloud strategy that began with the US$34bn Red Hat purchase in 2019. 

The company provides computing infrastructure, software and consulting services, but has struggled at times to match the growth of pure-play cloud providers.

Arvind Krishna, Chairman, President and CEO of IBM, says: “Data is spread across public and private clouds, data centres and countless technology providers.”

“With the acquisition of Confluent, IBM will provide the smart data platform for enterprise IT, purpose-built for AI.”

How Kafka founders built Confluent for real-time data

Confluent was founded in 2014 by the creators of Apache Kafka, an open-source platform for streaming data that has become widely adopted across technology and financial services. 

The company offers both managed cloud services and software that organisations can run themselves.

The platform handles data in motion, connecting applications, databases and systems so information flows between them continuously. 

That matters increasingly for AI applications that need current information rather than stale data from overnight batch processes.

Jay Kreps, CEO and Co-Founder of Confluent, says joining IBM accelerates the company’s mission: “Since its founding, Confluent has helped organisations unlock the full potential of their data, driving innovation in an increasingly complex IT landscape,” he says.

“We are extremely proud of the work we’ve done in providing clients with a real-time data streaming platform for the next era of technology, including generative and agentic AI.”

Confluent serves more than 6,500 clients and maintains partnerships with Amazon Web Services (AWS), Microsoft, Google Cloud and Snowflake. 

The company has grown by offering deployment flexibility, from fully managed cloud services to self-managed installations for organisations with strict data sovereignty requirements.

Why AI workloads demand connected infrastructure

The acquisition reflects a shift as organisations move from experimenting with AI to deploying it across operations.

Gen AI systems that produce text, code or analysis need access to current data. 

Arvind argues the combined capabilities address a practical challenge facing businesses: “IBM and Confluent together will enable enterprises to deploy Gen and agentic AI better and faster by providing trusted communication and data flow between environments, applications and APIs,” he says.

IBM plans to integrate Confluent’s streaming capabilities with its existing Data and Automation portfolio, which includes tools for managing databases and governing data usage. 

The company sees the combination as infrastructure for organisations that need to ensure data quality while maintaining controls as they scale AI deployments.

IBM will pay US$31 per share in cash using existing liquidity. 

The boards of both companies have approved the transaction, which requires regulatory approval and a shareholder vote. Confluent shareholders representing approximately 62% of voting power have indicated support.

Jay says the deal positions Confluent for its next phase: “I look forward to the future we will build together as Confluent becomes part of IBM,” he says. 

IBM expects completion by mid-2026.