Street View: IBM powers up AI game with Confluent deal

IBM IBM.N said on Monday it will buy data infrastructure company Confluent CFLT.O in a deal valued at $11 billion, ramping up its cloud-computing offerings to capitalize on an AI-driven demand boom

IBM will use cash on hand to fund the Confluent deal, which is expected to close by mid-2026

WHEN OPEN SOURCE OPENS DOORS

RBC Capital Markets says the strategic rationale lies in IBM complementing its Data and Automation portfolio while leveraging its go-to-market capabilities to penetrate the roughly 150,000 open-source Kafka users—a widely adopted distributed event-streaming platform

TD Cowen expects minimal antitrust concerns, citing Confluent's open-source software structure and limited product overlap with IBM

Bernstein says it does not expect counter-bids as rival Databricks would probably be comfortable with IBM as an owner due to its strong open-source commitment and relatively small size of market compared with Databricks' core business

Stifel says deal reflects Confluent's fair value, driven by growing role of real-time data streaming for AI and database migration, and also validates the model of enterprises paying for supported open-source software