IBM buys Confluent for $11 billion to build 'Real-Time Nervous System' for Enterprise AI

IBM has announced a definitive agreement to acquire Confluent Inc., the cloud-native data streaming pioneer built on Apache Kafka, in an all-cash transaction valued at $11 billion ($31 per share). The massive deal is IBM's latest and most significant move to solidify its position in the hybrid cloud and enterprise Artificial Intelligence (AI) race.

The acquisition is centered on the critical need for real-time data pipelines to fuel modern generative and "agentic" AI systems, which require clean, fresh, and contextualized data streams to operate effectively.

The Strategic Rationale: The AI Nervous System

Confluent's platform is widely regarded as the industry standard for "data in motion," enabling organizations to connect, process, and govern data and events in real time. IBM CEO Arvind Krishna has championed the purchase as the necessary step to bridge the gap between AI models and the chaotic, distributed data that exists across today's enterprises.

• Fueling WatsonX: Confluent's technology provides a proven, open-source foundation for feeding IBM's watsonx AI and data platform with trusted, real-time data streams, eliminating data silos that currently slow down enterprise AI adoption.

• Hybrid Cloud Integration: The platform will serve as the "central nervous system" for connecting applications, analytics, and data systems across public clouds, private data centers, and various technology providers—the core of IBM's hybrid cloud strategy.

• Open-Source Commitment: The acquisition reinforces IBM's long-standing commitment to open-source software, building on previous major deals like Red Hat and HashiCorp. Confluent's foundation in Apache Kafka is seen as highly complementary to this strategy.

"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," said IBM Chairman and CEO Arvind Krishna.

Market Reaction and Deal Details

The acquisition price of $31 per share represents a significant premium of approximately 34% over Confluent's closing price of $23.14 the Friday before the announcement.

• Stock Surge: Confluent's stock (NASDAQ: CFLT) immediately surged by over 29% in pre-market trading following the news, reflecting strong investor confidence in the deal's completion.

• Financial Impact: IBM anticipates the transaction will be accretive to its adjusted EBITDA within the first full year and to free cash flow in year two, post-close.

• High Certainty: Confluent's largest shareholders, who control approximately 62% of the voting power, have already entered into a voting agreement supporting the transaction, drastically reducing the risk of a shareholder rejection.

The transaction is expected to close by the middle of 2026, subject to customary closing conditions and regulatory approvals.