IBM said on Monday (Dec 8) it will buy data infrastructure company Confluent in a deal valued at US$11 billion, ramping up its cloud-computing offerings to capitalise on an AI-driven demand boom.

Big Blue, under CEO Arvind Krishna, has doubled down on M&As to beef up its cloud and software business – a high-growth, high-margin area – as customers invest to upgrade their digital infrastructure to house complex artificial intelligence applications.

Mountain View, California-based Confluent provides technology needed to manage massive, real-time data streams for artificial intelligence models.

“IBM and Confluent together will enable enterprises to deploy generative and agentic AI better and faster,” Krishna said in a statement.

“With the acquisition of Confluent, IBM will provide the smart data platform for enterprise IT, purpose-built for AI.”

The offer price of US$31 per share represents a premium of around 34% to Confluent’s last close. Confluent’s shares surged nearly 30% in premarket trading, while IBM fell more than 2%.

The Confluent stock is up nearly 44% since October 7, the last trading session before Reuters reported that the company was exploring a sale after attracting acquisition interest.

IBM has long turned to deal-making to gain scale and fend off competition, especially in cloud computing.

In April last year, the company bought cloud firm HashiCorp in a deal valued at US$6.4 billion. Its US$34 billion deal for Red Hat in 2019 is credited by analysts as the central catalyst that boosted its cloud business.

Source: Businesstimes