IBM to acquire DataStax, boosting generative AI capabilities

ARMONK, N.Y. - IBM (NYSE: IBM), the $241 billion technology giant currently trading near its 52-week high of $265.72, announced its plans to acquire DataStax, a leading AI and data solution provider, in a move aimed at enhancing its WatsonX portfolio and accelerating the use of generative AI within enterprises. According to InvestingPro data, IBM has demonstrated strong momentum with a 45.74% return over the past year. The acquisition, which is expected to close in the second quarter of 2025, will enable businesses to unlock value from their unstructured data, which is often underutilized in AI models. This strategic move comes as IBM maintains its position as a prominent player in the IT Services industry, with annual revenue reaching $62.75 billion.

DataStax is known for its creation of AstraDB and DataStax Enterprise, database solutions powered by Apache Cassandra®, and Langflow, an open-source tool for low-code AI application development. These technologies are expected to complement IBM’s existing offerings, such as the watsonx.data hybrid open data lakehouse and the watsonx.ai integrated AI development studio.

IBM’s Senior Vice President, Dinesh Nirmal, emphasized that the right infrastructure is crucial for realizing the full potential of generative AI. He noted DataStax’s deep competency in harnessing unstructured data and its commitment to open-source AI, which aligns with IBM’s innovation goals.

Chet Kapoor, Chairman and CEO of DataStax, highlighted the challenges enterprises face in unlocking the value of their data for AI applications. He expressed excitement about executing the vision of "no AI without data" alongside IBM.

The acquisition also reinforces IBM’s dedication to open-source AI, promising continued support and innovation within the Apache Cassandra®, Langflow, Apache Pulsar™, and OpenSearch communities.

DataStax serves hundreds of customers, including prominent companies like FedEx (NYSE:FDX), Capital One (NYSE:COF), The Home Depot (NYSE:HD), and Verizon (NYSE:VZ). The financial terms of the deal have not been disclosed, and the completion of the acquisition is subject to customary closing conditions and regulatory approvals. IBM’s strong financial position is underscored by its impressive dividend track record, having raised dividends for 29 consecutive years. For deeper insights into IBM’s valuation and growth prospects, including 12 additional exclusive ProTips, visit InvestingPro, where you’ll find comprehensive analysis in the Pro Research Report, part of our coverage of 1,400+ top US stocks.

This announcement is based on a press release statement from IBM.

In other recent news, HashiCorp (NASDAQ:HCP) Inc. has received approval from the UK’s Competition and Markets Authority for its $6.4 billion acquisition by International Business Machines Corporation (NYSE:IBM). This regulatory clearance is a significant step forward in the merger process, initially announced in April, with IBM agreeing to acquire HashiCorp for $35 per share in cash. Meanwhile, IBM has entered into underwriting agreements for new debt securities, including both Euro and USD denominated notes, as part of its broader financial strategy to maintain liquidity and fund growth initiatives. The company has also filed for multiple euro-denominated notes with varying due dates, aiming to list these on the New York Stock Exchange.

Additionally, IBM has formed a new partnership with Riyadh Air to implement its watsonx AI products, enhancing the airline’s digital-first strategy as it prepares for its inaugural flights in late 2025. Furthermore, Stifel analysts have raised IBM’s stock price target to $290, maintaining a Buy rating, following the company’s annual investor day where expectations for mid-single-digit revenue growth and significant free cash flow were outlined. These recent developments reflect IBM’s strategic moves in mergers, financial management, and technological innovation, demonstrating its efforts to strengthen its market position and growth potential.

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