By Liana Baker, Bloomberg

International Business Machines Corp. is buying the data-streaming platform Confluent Inc. for about $9.3 billion, marking one of its largest takeovers yet and a major bet on the kind of enterprise software that artificial intelligence tools need to perform tasks in real time.

IBM will pay $31 a share, according to a statement issued Monday. The enterprise value, which includes debt, is $11 billion, it said. The companies expect the deal to close by the middle of 2026.

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If the transaction fails or is terminated, IBM will pay Confluent a breakup fee of $453.6 million, according to an accompanying regulatory filing.

The acquisition “could significantly improve IBM’s AI portfolio, and subsequently its software unit’s sales growth,” Bloomberg Intelligence analysts Anurag Rana and Andrew Girard wrote Monday after the Wall Street Journal reported the deal talks. Confluent shares rose as much as 29% to $29.86 after markets opened in New York, more than a dollar below the offer price. IBM shares rose as much as 2.4%.

The AI boom has touched off billions of dollars in deals for businesses that build, train or leverage the technology, propelling the value of an entire ecosystem of data center developers, software makers, generative AI tool developers and data management firms. Mountain View, California-based Confluent sits in the data corner of that world, providing a platform for companies to gather — or “stream” — and analyze data in real time as opposed to shipping data in clunkier batches.

Manufacturers such as Michelin, for example, have used Confluent’s platform to optimize their inventories of raw and semi-finished materials live. Instacart adopted Confluent to develop real-time fraud detection systems and gain more visibility into the availability of products sold on its grocery delivery platform. Businesses are increasingly tapping AI systems that manage tasks like this in real-time and require live flows of data to do so.

IBM, which pioneered mainframe computers, has been trying to reposition its business around AI over the past few years. Under Chief Executive Officer Arvind Krishna, it’s been buying software companies and selling generative AI-related services to enterprise clients. Software now makes up almost half its total revenue and continues to grow at a steady rate. The Confluent acquisition would be IBM’s biggest since it bought cloud software firm Red Hat for about $34 billion in 2019.

Confluent’s takeover stands apart from the multibillion-dollar deals that have dominated the AI space in recent months, largely focused on data centers and the computing power necessary to build and power AI systems themselves. Soaring demand for such capacity has fueled massive transactions, including BlackRock Inc.’s $40 billion purchase of Aligned Data Centers and Oracle Corp.’s agreement to supply OpenAI with about 4.5 gigawatts of computing power, worth as much as $300 billion.

Confluent was started in 2014 by a trio of founders who came from LinkedIn, including the company’s current chief executive officer, Jay Kreps. The firm’s shares had fallen 17% this year before the Wall Street Journal report. The stock is far below its intraday peak of $94.97 a share in November 2021, following the company’s initial public offering.

The acquisition builds on a five-year partnership between the two firms, which allowed some IBM customers to use Confluent’s data-streaming platform.

IBM completed its $6.4 billion purchase of HashiCorp Inc. in February and recently considered buying Informatica Inc., another infrastructure-focused vendor that was ultimately acquired by Salesforce Inc.

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