IBM (NYSE:IBM) CEO Arvind Krishna has forecasted a significant shift in the use of AI by enterprises, noting that the technology will drive tangible business results. This comes as the company’s AI bookings surpass the $1 billion mark.
What Happened: Krishna, during the Q1 2024 Earnings Call, highlighted the increasing importance of technology in the global economy, particularly in driving productivity and enhancing customer experience.
The CEO also emphasized the growing traction of enterprise AI, with more clients expected to transition from experimenting to deploying AI at scale for productivity gains. IBM’s AI offerings have seen consistent growth, with a book of business exceeding $1 billion, primarily driven by consulting services.
Krishna emphasized key partnerships driving AI and hybrid cloud growth, including collaborations with NVIDIA Corp and ServiceNow Inc (NYSE:NOW) to enhance AI capabilities and digital transformation. The Adobe partnership expanded to include OpenShift and watsonx in the Adobe Inc (NASDAQ:ADBE) Experience platform.
“This quarter, we’ve progressed strategic partnerships with a number of industry leaders, consulting joint forces with NVIDIA to accelerate clients’ AI journeys,” Krishna said.
IBM’s comprehensive AI strategy, centered around the watsonx platform, is designed to help clients scale AI. The platform enables clients to build their AI solutions, incorporating both IBM and third-party models. The company’s infrastructure segment is also playing a crucial role as clients utilize their hardware investments in their AI strategies.
IBM’s full-stack approach, from on-chip AI processing to AI accelerator cards, is designed to facilitate model building and training on any platform, with easy deployment on IBM Z. The Telum chip, a unique feature, enables real-time AI inferencing.
IBM is also committed to an open innovation ecosystem around AI, with recent collaborations with the Spanish government and other industry leaders. The company continues to invest in emerging technologies, such as quantum computing, and is focused on portfolio optimization.
Why It Matters: IBM’s Q1 2024 earnings call comes on the heels of a revenue miss but an EPS beat, as the company reported a 1% YoY increase in revenue to $14.46 billion. The company’s AI strategy and strength are seen as crucial factors amid this financial performance.
IBM’s focus on AI is not new. The company has been actively involved in the AI space, from advocating for open AI models to joining forces with over 50 AI companies and research institutions in an open AI advocacy initiative. This commitment to AI is now reflected in the company’s Q1 performance and its future outlook.
IBM Price Action: IBM shares were down 8.47% after hours at $168.51 at the time of publication, according to Benzinga Pro.
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