This article first appeared on GuruFocus.
IBM (IBM, Financials) is close to a deal to acquire Confluent for about $11 billion, according to the Wall Street Journal, a move that would deepen the company’s move into cloud and data infrastructure software. A formal announcement could come as soon as Monday, although neither company has commented.
Confluent’s platform processes massive data flows in real time, technology used everywhere from banking systems to e-commerce traffic. The company has been exploring a sale since October and has attracted interest from several potential buyers. The market value is almost $8 billion.
For IBM, the deal would be another step in its bid to revive software growth after investors raised concerns about slowing cloud momentum earlier this year. The company has leaned more heavily on acquisitions, including last year’s $6.4 billion purchase of HashiCorp, to strengthen its position in AI-related cloud services.
The interest in Confluent is also part of a larger trend among large companies to improve their data pipelines by creating generative AI tools. IBM has made software the main focus of its strategy under CEO Arvind Krishna. Buying Confluent would fit well with that approach.
