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

Big Blue’s shares fell more than 2% in premarket trading.

The offer price of $31 per share represents an about 50% premium to Confluent’s closing price of $20.73 on October 7 – the last trading session before Reuters first reported its exploration of a sale after attracting acquisition interest.

IBM has doubled down on M&As to beef up its cloud and software products – a high-growth, high-margin area – as customers invest in upgrading digital infrastructure to house complex artificial intelligence applications.

In April last year, IBM bought cloud firm HashiCorp in a deal valued at $6.4 billion, as the company emphasizes inorganic growth under CEO Arvind Krishna.

Mountain View, California-based Confluent provides technology needed to manage massive, real-time data streams for artificial intelligence models.

IBM will fund the deal with cash on hand and the transaction is expected to close by the middle of 2026.