IBM has observed that as clients integrate artificial intelligence (AI) into more facets of their businesses, they are confronting a new challenge: how to track all these AI implementations.
IBM's Chief Financial Officer, Jim Kavanaugh, stated that the era when cost was the primary barrier to deploying AI is now over. He said that currently, as companies begin utilizing more AI technologies, their main challenge lies in organizing and securing the billions of new applications and AI agents entering their operations.
Kavanaugh remarked, "I think the challenge in the past was the cost curve. But the biggest challenge right now is complexity and expertise."
Kavanaugh explained that when companies incorporate AI into their operations, each step in a workflow essentially becomes its own application. Many of these applications also require multiple AI agents. Businesses are still exploring the optimal methods for managing these vast operational systems.
He stated, "When you have billions of new applications and a massive number of AI agents running on top of them, enterprises need a way to manage, govern, and orchestrate all of this."
IBM believes it is uniquely positioned to meet this need. Rather than competing directly with AI providers like NVIDIA or Broadcom, IBM acts as an intermediary, helping companies implement, scale, and ultimately manage their AI systems.
The Armonk, New York-based company offers consulting, software, and infrastructure services. This means it can provide clients with the necessary tools to manage AI systems and instruct them on how best to utilize these tools.
AI has become a driving force across IBM's various business segments. On Wednesday, IBM reported a 12% revenue increase for the fourth fiscal quarter ended December 31. Its AI business portfolio grew by $3 billion compared to the third quarter, reaching a total value exceeding $12.5 billion.
On Thursday afternoon, the company's stock price rose by 3.9%, to $305.66.
Kavanaugh said part of the challenge in scaling AI within enterprises involves making it function effectively for a single company's specific and diverse needs. He added that achieving seamless AI operation across departments such as finance, human resources, supply chain, and operations is no simple task.
To address this issue, IBM employs what it calls the "client zero" approach. In other words, it first adopts AI, hybrid cloud, and automation technologies within its own business operations, then releases these technologies to the public and offers consulting services based on its experience.
Kavanaugh concluded, "Embedding AI into the workflow of a company's operations is not easy. It requires both technical and domain expertise to understand how workflows function."
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