IBM plans to acquire data infrastructure company Confluent for about $11 billion to strengthen its artificial intelligence cloud services.
As reported, wall street journalthe American multinational technology company is in advanced negotiations, allowing Big Blue to meet the growing demand for cloud computing.
Confirmation of the deal to acquire Confluent, an IT company known for providing massive real-time data streams, could be announced soon.
The companies have not yet commented on the potential acquisition.
Confluent's stock price soared 20% to 28% in after-hours trading on the news.
According to Reuters, Confluent has been considering a potential sale since October and has approached investment banks to oversee the acquisition process.
The slowing growth in its cloud software business that IBM reported in October may be a key reason for its acquisition of Confluent to maintain reliability and growth, as investors believe that only solid software performance can keep overall growth on track.
IBM's acquisition strategy is critical to meeting investor expectations. In 2024, the company paid HashiCorp $6.4 billion to enhance its cloud-based services to capitalize on demand from the AI boom.
Recent acquisition moves also highlight the surge in demand for data infrastructure fueled by generative AI. In May, Salesforce signed a deal to buy software maker Informatica for $8 billion to strengthen its AI capabilities.
Confluent holds a market share of about $8.09 billion, compared to New York-based IBM's valuation of about $287.84 billion, according to data compiled by LSEG.
