IBM is buying HashiCorp for $6.4bn Credit: Photo Illustration by Dominika Zarzycka/SOPA Images/LightRocket via Getty Images)

IBM announced on Wednesday (24 April) that it will buy HashiCorp in a deal valued at $6.4bn. The move will expand IBM’s cloud-based software products as the demand for AI continues to grow. 

The rise of cloud-native workloads and the boom of GenAI deployment has led to technology professionals working with increasingly heterogeneous, dynamic, and complex infrastructure strategies, IBM said. 

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US company HashiCorp provides businesses with the tools to build and manage their infrastructures on the cloud. 

“Enterprise clients are wrestling with an unprecedented expansion in infrastructure and applications across public and private clouds, as well as on-prem environments,” said Arvind Krishna, IBM chairman and CEO.

“The global excitement surrounding GenAI has exacerbated these challenges and CIOs and developers are up against dramatic complexity in their tech strategies,” Krishna added. 

Krishna said that combining IBM’s portfolio and HashiCorp’s capabilities will create a “comprehensive hybrid cloud platform designed for the AI era.”

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The latest deal highlights IBM’s focus on software, as lower enterprise spending due to higher interest rates has negatively affected its consulting business.

IBM’s software business grew 5.5% in the first quarter, boosted by the company’s focus on expanding its cloud offerings.

GlobalData forecasts that the overall AI market will be worth $909bn by 2030, registering a compound annual growth rate (GAGR) of 35% between 2022 and 2030.

In the GenAI space, revenues are expected to grow from $1.8bn in 2022 to $33bn in 2027 at a CAGR of 80%.