While laying off employees, IBM makes a big purchase: planning to acquire Confluent for $11 billion as it transforms into AI
IBM spent $11 billion to acquire data streaming company Confluent, which could become the largest merger and acquisition record in recent years, with the deal possibly announced as early as Monday. The former blue giant is replacing HR positions with AI while aggressively acquiring core technologies for real-time data processing, making a big bet on AI transformation
IBM is advancing one of the largest mergers and acquisitions in its history to accelerate its strategic transformation in the field of artificial intelligence.
On Monday, the Wall Street Journal reported, citing informed sources, that IBM is in deep negotiations to acquire data infrastructure company Confluent for approximately $11 billion. The deal could be announced as soon as Monday, but there is still a risk of negotiations breaking down. As of last Friday, Confluent had a market capitalization of about $8 billion, while IBM's market capitalization was around $290 billion.
The technology provided by Confluent helps manage the real-time data streams required for large AI models, with the AI boom driving a surge in demand for its technology across industries such as retail, technology, and financial services.
This acquisition comes at a time of significant restructuring for IBM. In November, the company announced it would lay off thousands of employees by the end of the year, a move aimed at repositioning its business to adapt to the AI era, alongside other tech companies. Meanwhile, IBM is strengthening its AI and cloud computing capabilities through intensive mergers and acquisitions.
Largest Acquisition to Advance AI Strategy
If the deal is finalized, acquiring Confluent will become IBM's largest merger and acquisition in recent years. Last year, IBM acquired cloud software provider HashiCorp for $6.4 billion, further deepening its presence in the rapidly growing cloud and AI markets. This $11 billion deal is nearly double the size of the previous one.
Confluent's core technology focuses on real-time data stream management, which is essential infrastructure for running large AI models. As companies accelerate the deployment of AI applications, the demand for real-time data processing capabilities is growing exponentially.
IBM CEO Arvind Krishna recently revealed that the company has replaced hundreds of human resources staff with AI agents, allowing it to hire more programmers and salespeople. In October, IBM reported revenue growth for the third quarter, with consulting business growth exceeding expectations.
IBM's strategy reflects a typical transformation path for the tech industry in the AI era: optimizing internal operations through AI technology, cutting traditional positions, while rapidly acquiring key technological capabilities through external mergers and acquisitions, and reallocating resources to core growth areas.
The tech sector has become one of the most active industries for mergers and acquisitions this year. Google's parent company Alphabet acquired cybersecurity startup Wiz for $32 billion, Palo Alto Networks acquired CyberArk for $25 billion, and Salesforce acquired data management software company Informatica for $8 billion.
IBM is also competing in the field of quantum computing with Google, Microsoft, and numerous startups, aiming to build systems that surpass traditional computing capabilities. The company is developing larger-scale quantum chip clusters, which are expected to achieve large-scale quantum computing within the next five years
