The company said that it would buy the California data streaming outfit in an agreement valuing Confluent at $31 a share, which is a roughly 34 per cent premium on Friday’s $23.14 New York close. Confluent stock jumped to just less than $30 in early trading while IBM added two per cent to about $314 and stretched its gains this year to 42 per cent.

IBM called Confluent a natural fit that would help it expand its cloud and AI ambitions.

IBM's top suit, Arvind Krishna [pictured], said the takeover would let the company “deploy generative and agentic AI better and faster.”

Speaking to the Financial Times, IBM chief commercial officer Rob Thomas compared Confluent’s tech to industrial era railroads that “created all of the growth because railroads connected factories to cities, to ports, to people. Confluent is really the rails on which all these agents and applications will run.”

IBM said the deal will let it neaten its product line where technologies overlap while pushing Confluent’s services to a broader pool of customers. It follows IBM’s $6.4 billion acquisition of cloud software vendor HashiCorp this year.

Confluent, which has more than 6,500 customers, runs an open source data streaming platform that “connects, processes and governs” data and events in real time, according to a joint statement.

The outfit was founded in 2014 and floated at $36 a share in 2021. Its stock topped $93 the following year before getting clobbered by stiffening competition and slowing cloud spending.

MKI Global Partners managing director David O’Hara said: “Confluent sits naturally inside IBM’s software segment alongside Red Hat and HashiCorp, and fills a clear gap.”

O’Hara said regulators would probably see the takeover as IBM bulking up against rivals such as Azure, Google and AWS rather than a scheme to monopolise data streaming.

IBM said it expects the deal to boost profits within 12 months of closing in mid-2026 and to improve its free cash flow after two years.