IBM in talks to acquire Confluent for USD 11 bn as cloud software sees 9% growth
Why does this matter now? IBM’s board is reportedly circling Confluent, the data‑streaming firm behind Apache Kafka, with a deal value near $11 billion. While the tech is impressive, the timing is anything but casual.
The software giant has been wrestling with investor expectations ever since it pledged to shift focus toward cloud and AI. Here’s the thing: its cloud software segment logged a 9% year‑on‑year increase in third‑quarter revenue, yet the market reacted coldly, dragging the shares down 6% in after‑hours trade. The juxtaposition of modest top‑line growth and a falling stock price underscores the pressure on IBM’s leadership to prove the acquisition will translate into tangible momentum.
The conversation around a Confluent purchase therefore isn’t just about expanding a product portfolio; it’s a litmus test for IBM’s ability to revive confidence in its cloud strategy.
The potential takeover comes at a pivotal moment for IBM, which is under investor pressure to reinvigorate growth in its cloud software division. Despite IBM posting a 9% year-on-year growth in its topline in its third quarter, its stock slipped 6% on extended trading following the earnings results as investors grew wary about slowing momentum in core cloud offerings, raising concerns over its long-term trajectory. Confluent, valued at about $8.09 billion, has been exploring a sale and has hired an investment bank to manage the process after receiving interest from potential buyers, according to a Reuters report.
IBM, meanwhile, holds a market capitalisation of roughly $287.84 billion. A successful acquisition would extend IBM's M&A strategy under CEO Arvind Krishna, who has sharpened the company's focus on cloud and software. Last year, IBM acquired HashiCorp in a $6.4-billion deal aimed at expanding its cloud-native and automation capabilities amid rising enterprise spending on AI.
The interest in Confluent underlines the accelerating demand for data infrastructure platforms as companies race to build and deploy generative AI systems.
IBM’s pursuit of Confluent signals a clear intent to deepen its cloud‑software and AI portfolio. An $11 billion price tag would make the deal the largest of its kind for the company, granting control of a platform that powers real‑time data streaming for many enterprises. Yet the move arrives as IBM wrestles with investor pressure to revive growth in its cloud division.
A 9 % year‑on‑year revenue increase in the third quarter offered a modest lift, but the stock’s 6 % dip in after‑hours trading underscored lingering doubts. Will the acquisition translate into sustained top‑line momentum, or will integration challenges blunt its impact? The announcement, expected around December 8, could clarify the strategic calculus, but the outcome remains uncertain.
For now, IBM has positioned itself to potentially broaden its offering, though the market’s reaction suggests caution persists. Only the forthcoming details will reveal whether the Confluent deal delivers the expected boost to IBM’s cloud and AI ambitions.
Further Reading
- IBM in talks to acquire data-streaming company Confluent for about $11 billion - CNBC
- IBM’s planned $11 billion Confluent deal puts data privacy in the spotlight - Captain Compliance
- IBM’s $11B Confluent talks show how streaming data is becoming core cloud infrastructure - TechRadar Pro
- Why IBM wants Confluent: real-time data streams for hybrid cloud and AI - Protocol
- IBM’s Confluent pursuit signals next phase of AI and cloud consolidation - The Information
More in Business & Startups
Nordic pilot adds Gemini for Education, NotebookLM to boost AI literacy
Why does a handful of schools in Scandinavia suddenly matter to anyone watching AI in education?
Nagarro partners with OpenAI to apply generative AI to enterprise tasks
Nagarro’s new tie‑up with OpenAI signals a concrete step toward bringing large‑language models into...
Malahar’s Proven GCC‑Building Record Includes Ecolab, PFS, and others
India’s 2025 roster of retail‑focused Global Capability Center leaders reads like a who's‑who of...
Riyadh Air teams with IBM to deploy agentic AI on flights by early 2026
Riyadh Air has inked a deal with IBM to put agentic artificial intelligence on its aircraft, aiming...
Perplexity's BrowseSafe patches agent gaps after Brave finds Comet flaw
Perplexity’s newest safety layer, BrowseSafe, arrived just as the AI‑browser community began to...
Common Questions Answered
Why is IBM considering an $11 billion acquisition of Confluent at this time?
IBM is under investor pressure to boost growth in its cloud software division, and the acquisition of Confluent would give it control of a leading real‑time data‑streaming platform built on Apache Kafka. The deal aligns with IBM’s strategy to deepen its cloud and AI portfolio amid a modest 9% year‑on‑year revenue increase in the third quarter.
How did IBM's stock react after reporting a 9% growth in its cloud software segment?
Despite the 9% year‑on‑year revenue growth in the third quarter, IBM’s shares fell about 6% in after‑hours trading. Investors expressed concern that the momentum in core cloud offerings might be slowing, leading to a negative market reaction.
What role does Apache Kafka play in Confluent's value proposition for IBM?
Confluent is the company behind Apache Kafka, a widely adopted open‑source platform for real‑time data streaming used by many enterprises. Acquiring Confluent would give IBM direct access to this technology, enhancing its ability to offer integrated cloud‑software and AI solutions.
How does the proposed $11 billion price tag compare to Confluent's current valuation?
The deal is valued at roughly $11 billion, which exceeds Confluent’s current market valuation of about $8.09 billion. This premium reflects IBM’s strategic intent to secure a leading streaming platform and signals the largest acquisition of its kind for IBM to date.