Why IBM wants Confluent as part of its AI and cloud strategy

• IBM is in talks to buy Confluent for $11bn to advance its cloud and AI plans.
• Confluent’s platform gives AI agents steady data and aligns with IBM’s shift from large AI data centres.

Talks between IBM and Confluent appear to be entering the final stretch, with reports pointing to an acquisition worth about $11 billion.

Confluent, based in California, builds an open-source platform that handles large amounts of real-time data, from bank payments to activity on websites. The company presents its cloud-based system as a central point that connects different apps to live data streams, which can help businesses react faster across their operations.

For the third quarter, Confluent posted $286 million in subscription revenue and expects to reach up to $296.5 million in the fourth quarter. The company is valued at around $8.09 billion, based on LSEG data. IBM’s market value is roughly $287.84 billion.

IDC expects more than one billion new logical applications to appear by 2028. Those applications, along with AI agents, will need steady access to connected and trusted data. The idea behind the IBM–Confluent deal is to link applications, data systems, analytics, and AI agents in a single workflow that works across hybrid cloud setups.

“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. Data is spread across public and private clouds, data centres and countless technology providers,” said Arvind Krishna, IBM chairman, president and chief executive officer. “With the acquisition of Confluent, IBM will provide the smart data platform for enterprise IT, purpose-built for AI.”

Jay Kreps, CEO and co-founder of Confluent, said the company has focused on giving organisations real-time access to their data. “We are excited by the potential to join IBM and to accelerate our strategy with IBM’s go-to-market expertise, global scale and extensive portfolio. I look forward to the future we will build together as Confluent becomes part of IBM.”

Reuters reported in late 2025 that Confluent had been exploring a sale after receiving interest from potential buyers. IBM’s approach comes at a time when demand for companies that manage real-time data is rising, fuelled by the wider shift toward generative AI.

IBM completed its $6.4 billion acquisition of HashiCorp earlier this year as part of its plan to expand its cloud software offerings. The Confluent deal follows the same direction.

Under the agreement, IBM will pay $31 in cash for each of Confluent’s outstanding shares, creating an enterprise value of $11 billion. IBM will fund the deal using available cash.

Both companies’ boards have approved the transaction. Confluent’s major shareholders, who hold around 62% of voting power, have agreed to support the deal. Final approval from regulators and Confluent shareholders is still required. The companies expect to close the deal by mid-2026.

IBM named a critical ICT provider under DORA

Separately, IBM has been classified by the EU’s supervisory bodies—EBA, EIOPA, and ESMA—as a critical ICT provider under the Digital Operational Resilience Act (DORA). The regulation aims to make sure that financial firms and their technology partners can handle disruptions such as cyberattacks or system failures.

The designation places IBM under direct oversight from these authorities. It also means IBM must meet a set of resilience and compliance standards tied to the stability of Europe’s financial system. For IBM’s clients, the decision ensures the company will follow DORA’s operational requirements going forward.

A different long-term AI plan

IBM’s interest in Confluent also reflects how the company is shaping its AI strategy. Unlike other major tech firms, IBM is not pouring large sums into giant AI data centres. In an interview with The VergeKrishna said he doubts that the trillions of dollars going into AI data centres will bring the returns companies expect.

He remains positive about AI, especially its role in helping enterprise customers. Krishna said he believes AI will unlock trillions of dollars in productivity for businesses. IBM has already secured $9.5 billion in AI-related work, much of it in consulting.

How Confluent fits into IBM’s AI push

Confluent’s platform, built on Apache Kafka, has become a common tool for linking software systems without tight, direct connections. Kafka works as an event hub, allowing programs to share information without depending on each other in rigid ways.

This model is useful for AI agents that need to interact with many tools and data sources. Direct connections can make systems fragile—if one part fails, everything can break. With an event-driven platform like Confluent’s, AI agents can work independently while still exchanging information through a shared channel.

For IBM, Confluent adds another core layer to its cloud and AI offerings. It joins earlier pieces such as Red Hat, which IBM acquired in 2019, and the watsonx platform for building and managing AI models.

Why IBM sees value in Confluent

Both companies focus on enterprise customers, which gives IBM room to cross-sell products and reach new clients. Confluent already works with 40% of Fortune 500 companies, and IBM has long-standing ties with major firms and governments.

IBM expects the deal to help speed up its revenue growth, with free cash flow improving two years after the acquisition closes. The company is already seeing faster revenue gains thanks to its AI business. IBM expects constant-currency revenue to rise more than 5% this year, compared to 3% in 2023 and 2024. Confluent expects to bring in about $1.11 billion in 2025, roughly 20% higher than the year before.

While the $11 billion price tag is largeIBM appears confident that Confluent’s data streaming platform will deliver a stronger return than heavy spending on massive AI infrastructure. For IBM, the deal supports its larger AI plan and strengthens its product lineup.

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