IBM said Monday that it will acquire Confluent, the real-time data streaming company built on Apache Kafka, for $11 billion. The deal, announced jointly from IBM’s Armonk headquarters and Confluent’s Mountain View campus, will have IBM paying $31 per share in cash. That’s an all-cash offer backed entirely by IBM’s balance sheet, reflecting how central data plumbing has become to the company’s long-term cloud and AI strategy.
Confluent has long been considered a crown jewel of enterprise data infrastructure. Its technology handles what businesses increasingly rely on: fast, reliable, real-time data movement across applications and environments. As organizations adopt generative and “agentic” AI systems. AI that not only generates but acts, this constant data flow becomes mandatory.
IBM CEO Arvind Krishna put the rationale simply. “IBM and Confluent together will enable enterprises to deploy generative and agentic AI better and faster by providing trusted communication and data flow between environments, applications and APIs,” he said in the announcement.
With corporate data now scattered across cloud vendors, on-premises systems and private data centers, Krishna said the combined companies will “provide the smart data platform for enterprise IT, purpose-built for AI.”
Confluent CEO Jay Kreps echoed that framing, noting that the company has “helped organizations unlock the full potential of their data” in an era when the IT landscape has become both more fragmented and more dependent on real-time data movement.
For Confluent, joining IBM means plugging into a global sales and services machine while expanding the reach of its data-streaming tools.
The acquisition is also a response to the enormous growth in data volume and application complexity. IDC estimates that more than one billion new “logical applications” will be created by 2028, software built to automate processes, personalize interactions and drive AI-based decision-making.
That explosion of applications mirrors the growth in the broader data market. Confluent says its addressable market has doubled from roughly $50 billion to $100 billion since 2021. Behind the scenes, the driver is simple: Every new application becomes another source of data, and AI systems require that data to flow freely and cleanly.
Both companies argue that current IT environments, split across multiple clouds, vendors and legacy systems—are too fragmented to support advanced AI without a unifying data fabric. Confluent’s platform addresses this by connecting data from dozens of sources and making it available in real time. IBM brings the automation, AI tools and enterprise integration stack to turn that data into usable intelligence.
How the technology fits together
Confluent’s platform, built on Apache Kafka, is the backbone of many real-time systems in finance, retail, logistics, telecom and tech. It moves data “in motion,” ensuring that events, everything from customer transactions to machine logs, are captured and transmitted as they happen.
Confluent offers several deployment models:
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Confluent Cloud, a fully managed, serverless version of Kafka.
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Confluent Platform, the self-managed enterprise edition.
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WarpStream, a hybrid “bring your own cloud” model.
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Confluent Private Cloud, for private, on-premises environments.
IBM plans to pair these with its own automation and AI infrastructure software, creating what it calls an end-to-end data foundation for generative AI systems and AI agents.
The transaction is expected to close by mid-2026, pending regulatory and shareholder approvals. Importantly, investors holding about 62% of Confluent’s voting power have already agreed to support the deal, providing a strong early signal that the acquisition will move forward.
IBM expects the deal to be accretive to adjusted EBITDA within its first full year after closing, and to increase free cash flow by year two. Those expectations reflect the high-margin nature of data-infrastructure software and the significant cross-selling potential across IBM’s consulting, AI and cloud businesses.
The Confluent acquisition aligns with IBM’s 25-year pattern of investing in open-source platforms. It follows the high-profile purchases of Red Hat and HashiCorp—two companies that, like Confluent, sit at the heart of enterprise infrastructure.
Confluent already works with cloud giants including AWS, Google Cloud Platform, Microsoft and Snowflake, mirroring IBM’s own “open ecosystem” approach. More than 6,500 companies use Confluent today, including over 40% of the Fortune 500.
IBM is betting that Confluent will help it deliver the data backbone those systems require.
If the deal clears regulatory approval, and if both companies can execute on the promised product integrations, the combined platform could become a central component of enterprise AI architectures, much as Red Hat became a cornerstone of IBM’s hybrid-cloud business.
