IBM to Acquire Confluent to Create Smart Data Platform for Enterprise Generative AI
Confluent has entered into a definitive agreement to be acquired by IBM
This is a Press Release edited by StorageNewsletter.com on December 16, 2025 at 2:02 pmSummary:
- $11B acquisition to deliver end-to-end data platform for businesses to connect, process and govern data for applications and AI agents
- Transaction expected to be accretive to adjusted EBITDA within the first full year, and free cash flow in year two, post close
IBM and Confluent Inc., a data streaming pioneer, announced they have entered into a definitive agreement under which IBM will acquire all of the issued and outstanding common shares of Confluent for $31 per share, representing an enterprise value of $11 billion.
Confluent provides a leading open-source enterprise data streaming platform that connects, processes and governs reusable and reliable data and events in real time, foundational for the deployment of AI.
IDC estimates that more than one billion new logical applications will emerge by 2028, reshaping technology architectures across industries. To fuel meaningful outcomes and drive productivity in operations, these applications, as well as AI agents, need access to connected and trusted data – in real time. IBM and Confluent will enable end-to-end integration of applications, analytics, data systems and AI agents to drive intelligence and resilience in hybrid cloud environments.
“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, datacenters and countless technology providers,” said Arvind Krishna, chairman, president and CEO, IBM. “With the acquisition of Confluent, IBM will provide the smart data platform for enterprise IT, purpose-built for AI.”
“Since its founding, Confluent has helped organizations unlock the of their data, driving innovation in an increasingly complex IT landscape. We are extremely proud of the work we’ve done in providing clients with a real-time data streaming platform for the next era of technology, including generative and agentic AI,” said Jay Kreps, CEO & co-founder, Confluent. “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.”
The real-time nature of Confluent’s platform is critical for organizations as they leverage data living across all IT environments. Confluent addresses the challenges of today’s technology and data landscape. Confluent excels at preparing data for AI, keeping it clean and connected across systems and applications, eliminating silos inherent in agentic AI. In the last four years alone, Confluent’s total addressable market (TAM) has doubled from $50 billion to $100 billion in 2025. Confluent’s real-time data and event streaming capabilities, combined with IBM’s AI infrastructure software and Automation offerings, will better position the companies to capture this opportunity.
Transaction Rationale
- Strategic Fit: Confluent is a natural fit for IBM, consistent with the company’s hybrid cloud and AI strategy. Data and applications are experiencing dramatic growth – by 2028, global data will more than double, and over one billion new applications will emerge. This exponential growth will be amplified by the continued adoption of AI, increasing demands on IT departments. Organizations around the world turn to IBM to simplify, automate and integrate disparate systems. The addition of Confluent will complement IBM’s existing capabilities in its Data and Automation portfolio. Additionally, the acquisition of Confluent represents further commitment to IBM’s 25-year history of open-source innovation and investment, building on the acquisitions of open-source leaders like Red Hat and HashiCorp
- Strong Synergy Opportunities: The acquisition of Confluent is expected to drive substantial product synergies across IBM’s portfolio – including AI products and services, Automation, Data and Consulting – and accelerate revenue growth by leveraging IBM’s go-to-market reach. The acquisition is also expected to result in significant operational efficiencies through IBM’s scale and best-in-class productivity actions
- Attractive Financial Profile: The acquisition of Confluent is expected to accelerate IBM’s growth over time. IBM also anticipates that the transaction will be accretive to adjusted EBITDA within the first full year and free cash flow in year two, post close
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Confluent is HQed in Mountain View, CA and currently has more than 6,500 clients across major industries – more than 40% of the Fortune 500. The company partners and integrates across the technology industry with leaders like Anthropic, AWS, GCP, Microsoft, Snowflake and more. This is consistent with IBM’s approach to deep industry partnership and working across a broad and open technology ecosystem of application providers, ISVs and hyperscalers.
Confluent is built on Apache Kafka, an open-source data and event streaming platform for data in motion. Apache Kafka enables fast, reliable and scalable data streaming capabilities for analytics, monitoring and event-driven architectures. Confluent’s platform includes Data Streaming, Connectors, Stream Governance, Stream Processing, Tableflow, Confluent Intelligence and Streaming Agents. The platform has flexible deployment options, including:
- Confluent Cloud: A fully managed deployment of Confluent’s data streaming platform. Its serverless Apache Kafka engine powers the most efficient way to deploy and scale real-time data streams in the cloud
- Confluent Platform: The self-managed deployment of Confluent’s data streaming platform, powered by a cloud-native, enterprise-grade distribution of Apache Kafka
- WarpStream: A hybrid Bring Your Own Cloud (BYOC) deployment model with the ease of use of a fully cloud hosted solution, but the cost profile, security and data sovereignty of a self-hosted deployment
- Confluent Private Cloud: Brings a cloud‑native, managed‑service experience to self‑managed, private environments, applying Confluent Cloud’s Kora innovations to on‑prem and private cloud Kafka workloads
Transaction Details
Under the terms of the agreement, IBM will acquire all of the issued and outstanding common shares of Confluent for $31 per share in cash, representing an enterprise value of $11 billion. Confluent will be acquired with available cash on hand.
The board of directors of IBM and the board of directors and independent special committee of Confluent have each approved the transaction. The acquisition is subject to approval by Confluent shareholders, regulatory approvals and other customary closing conditions.
Confluent’s largest shareholders and investors, who collectively hold approximately 62% of the voting power of Confluent’s outstanding common stock, entered into a voting agreement with IBM pursuant to which each has agreed to vote all of their common shares in favor of the transaction and vs. any alternative transactions.
The transaction is expected to close by the middle of 2026.
Comments
This pending acquisition surprised a bit the market but confirmed IBM's strategy but also unveiled holes in the current portfolio that triggered this move. The Time-to-Market dimension is key here as the market evolves super fast push by AI in all areas.
Like several big players, they believe they have internal resources and be able to develop such projects and products to address users' needs. The reality is different and it reminds us what happened with VMware acquisition campaign when the battle between EMC, Veritas Software and IBM was active. Veritas made several bids and finally gave up when estimated pricing pass a threshold, IBM internal forces claimed they can do similar things and didn't need such software from outside. We know the end of the story, how IBM played in virtualization, where VMware landed and it position and dominance on the market.
On the analytics side, IBM did a pretty similar approach but also demonstrated some evolution as they acquired StreamSets in 2024 for approximately $600 million from Software AG and now targets Confluent with this definitive acquisition agreement. The acquirer has a clear goal to connect applications and organize data flows and pipelines and this move adds even more credibility in this aspect. This transaction is among the largest in the software industry at $11 billion in a full cash deal at $21 per share. At the time of this transaction at the end of half 2026, Confluent revenue would be $1.1 billion and the transaction will be a 10x multiple on the revenue.
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Confluent generated almost $300 million for 3Q25 announced recently representing a 5.7% growth QoQ and !9.3% growth YoY. The ARR passed $1.11 billion already. 4Q25 should pass $300 million if we consider the recent QoQ growth ratio.
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IBM had the ambition to offer a smart data platform to enterprise IT especially as AI accelerates users' demands and increase pressure on big blue. The firm claims that Confluent is a natural fit so why this move just happening now as the price could have been much lower. It also illustrates the active race between data streaming solutions based on Apache Kafka for real-time data pipelines and distributed capabilities and Apache Spark with distributed processing with and players like Cloudera, Databricks... Clearly Confluent will complement StreamSets asset.
In 2025, the giant did 7 deals and spent approximately $20 billion as HashiCorp passed $6 billion and we also remember the Apptio acquisition in 2023 for $4.6 billion.
IBM reaffirms its open source strategy already highly visible with Red Hat, HashiCorp, Ceph or DataStax with Cassandra.
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