International Business Machines (IBM) has begun negotiations to acquire cloud software provider HashiCorp, sources familiar with the matter revealed to the Wall Street Journal. The news sent HashiCorp's stock up 24%, bringing its market value to an impressive $6.1 billion.

IBM Is Nearing Acquisition of HashiCorp: Report

While neither HashiCorp nor IBM representatives commented on the speculation, The Wall Street Journal hinted that a deal could materialize in the next few days, citing unnamed sources. 

HashiCorp, founded in 2012, debuted on Nasdaq in 2021. However, the departure of co-founder Mitchell Hashimoto in December raised questions about the company's future trajectory, CNBC reports.

READ MORE: Apple Reportedly Acquired French AI Startup Datakalab, Focusing on AI and Computer Vision

What is HashiCorp? 

Developers rely on HashiCorp software to handle infrastructure in public clouds operated by tech giants like Amazon as well as managing security credentials. 

Despite reporting a net loss of nearly $191 million on $583 million in revenue for the fiscal year ending Jan. 31, HashiCorp's revenue surged by almost 23% during the same period. In contrast, IBM struggled, with only a 2% revenue increase in 2023 amid a challenging economic climate.

Interestingly, Cisco had previously engaged in early acquisition talks with HashiCorp in 2019 and held $9 million in HashiCorp shares in March. 

CNBC tells us that the potential acquisition has had a notable impact on IBM's stock, initially causing a drop after The Wall Street Journal article publication but quickly recovering after that.

READ NEXT: FTC Sues to Block $8.5 Billion Merger of Coach and Michael Kors Handbag Makers