IBM (IBM.US) has announced its acquisition of data streaming platform Confluent (CFLT.US) in a deal valued at approximately $11 billion, including debt. The transaction offers $31 per share, representing an equity value of around $9.3 billion. Expected to close by mid-2026, this marks one of IBM's largest strategic investments to date, aimed at strengthening its enterprise software capabilities in AI-driven real-time data processing.

Following the announcement, Confluent's pre-market shares surged nearly 30% to $29.08, still slightly below the $31 offer price, before trading was halted. Meanwhile, IBM's shares dipped nearly 1% in pre-market trading.

The AI boom has triggered a wave of mergers and acquisitions, drawing in data center developers, software makers, generative AI tool creators, and data management firms. Confluent, headquartered in Mountain View, California, is a leader in real-time data collection and analysis, offering an alternative to traditional batch processing. Major manufacturers like Michelin rely on Confluent's platform to optimize inventory management, while Instacart uses it for real-time fraud detection and precise grocery inventory tracking.

IBM, historically known for its mainframe business, has been aggressively reshaping its portfolio around AI. CEO Arvind Krishna has prioritized software acquisitions and expanded generative AI services for enterprise clients, with software now accounting for nearly half of IBM's total revenue.

This acquisition is IBM's largest since its $34 billion purchase of cloud software firm Red Hat in 2019. Unlike recent AI-focused deals in data centers and computing power, IBM's move targets real-time data streaming capabilities. The transaction follows five years of collaboration, with some IBM clients already using Confluent's platform.

Before the deal was disclosed, Confluent's shares had fallen 17% year-to-date, a steep drop from its November 2021 IPO peak of $94.97. Earlier this year, IBM completed its $6.4 billion acquisition of HashiCorp and previously considered buying infrastructure software provider Informatica, which was ultimately acquired by Salesforce (CRM.US).