Aiming at AI and cloud service growth, IBM (IBM.US) invests $11 billion to buy Confluent (CFLT.US)

The Zhitong Finance App learned that IBM (IBM.US) is in in-depth negotiations to acquire data infrastructure company Confluent (CFLT.US), with a transaction amount of about 11 billion US dollars. The move is aimed at strengthening the “blue giant”'s ability to grasp the growing demand for cloud services.

The deal could be announced as early as Monday, sources said. Confluent is an open source platform for processing massive streams of real-time data from bank transactions to website clicks.

Last October's report said that Confluent was considering a potential sale and, after gaining interest from potential buyers, hired an investment bank to manage the process.

According to data compiled by the London Stock Exchange Group, Confluent's market capitalization is around $8.09 billion, while New York-based IBM's market capitalization is around $287.84 billion.

After IBM reported a slowdown in growth in its core cloud software business in October, investors became cautious, raising concerns about whether the company could maintain its growth momentum. Analysts say IBM needs stronger software business performance to keep overall growth on track.

IBM's acquisition strategy remains a key focus in meeting investor expectations. Last year, the company acquired HashiCorp for $6.4 billion, expanding its portfolio of cloud-based solutions to take advantage of growing demand driven by artificial intelligence.

Under CEO Arvind Krishna, IBM has focused more on the software business, aiming to profit from the growth in cloud service spending.

Interest in Confluent highlights a surge in demand for data infrastructure companies, stemming from a race to develop generative artificial intelligence. In May of this year, CRM.US agreed to buy software manufacturer Informatica for around $8 billion to enhance its artificial intelligence capabilities.

Confluent, headquartered in Mountain View, California, closed lower at $23.14 last Friday.