IBM acquiring Confluent to boost AI development capabilities

BREAKING -- IBM is acquiring streaming data specialist Confluent to boost its burgeoning AI development capabilities.

IBM on Monday reached an agreement to purchase Confluent for $11 billion in cash. Un

der the terms of the deal, which remains subject to customary due diligence and is expected to close by the middle of 2026, IBM will purchase all common shares of Confluent's stock for $31 per share.

Based in Mountain View, Calif., Confluent provides streaming data capabilities that enable customers to process data in near real time. The vendor's Confluent Cloud platform is built on Apache Kafka, an open-source technology for processing data in real time. Fellow streaming data specialists include Aiven and Redpanda.

IBM, meanwhile, is a tech giant that, like competitors AWS, Google Cloud and Microsoft, now provides an agentic AI development platform among its many offerings.

Agents are AI applications that can be trained with reasoning capabilities and contextual awareness, which enable them to act autonomously. For example, agents can take on tasks such as surfacing insights that lead to informed decisions  and performing business processes that improve an enterprise's overall efficiency. To perform most effectively, agents require large amounts of current, high-quality data. Platforms such as Confluent Cloud that can keep agents up-to-date with fresh data are therefore valuable parts of AI pipelines.

IBM provides some streaming data capabilities. However, by acquiring Confluent, it is adding not only a specialist but one founded by the same team -- including Jay Kreps, Jun Rao and Neha Narkhede -- that first developed Kafka in 2010.

Confluent is a leader in data streaming, and with agentic AI, streaming data is becoming the thing people really want. They want not only static data, but they want to have streaming, live data and analyze real-time data. … It's a gap for most vendors, so the fact that IBM made this acquisition is a big deal.

As a result, IBM's acquisition of Confluent will benefit users of IBM's AI development tools, according to Stephen Catanzano, an analyst at Omdia, a division of Informa TechTarget.

"Confluent is a leader in data streaming, and with agentic AI, streaming data is becoming the thing people really want," he said. "They want not only static data, but they want to have streaming, live data and analyze real-time data. … It's a gap for most vendors, so the fact that IBM made this acquisition is a big deal."

From Confluent's perspective, the deal is significant because it provides stability, Catanzano continued.

Confluent's stock price hit a high over $93 per share in November 2021, but dropped to the $15-range in August before rebounding slightly over the past few months.

"Confluent has had a rough ride lately," Catanzano said. "Its stock price has been up and down, and a lot of people didn't see its value. They're a niche player at this point with what they do, while the market is moving toward a full data platform, so I think they see where the market is going."

IBM's purchase of Confluent marks the second time this year that a major independent data management specialist has been acquired. Informatica in May reached an agreement to be acquired by Salesforce for $8 billion in a deal that finally closed in November.

Confluent unveiled its own agentic AI development suite in October. Now, however, rather than compete with IBM and other AI development providers, Confluent is joining forces with one of its previous competitors.

This story will be updated.

Eric Avidon is a senior news writer for Informa TechTarget and a journalist with more than 25 years of experience. He covers analytics and data management.