IBM exceeded fourth-quarter profit expectations, fueled by strong demand in its high-margin software segment as businesses increase IT spending. The company's software revenue saw its biggest leap in five years, attributed to customers prioritizing cloud infrastructure investments amidst the surge in generative AI adoption. IBM's AI business, measured by bookings and sales, exceeded $5 billion. The company's open-source approach to AI, exemplified by its 'Granite' models, contrasts with rivals like Microsoft, who charge for access. This strategy aligns with Chinese startup DeepSeek, which launched a free AI assistant, raising concerns about the dominance of U.S. tech companies.
surpassed analysts’ estimates for fourth-quarter profit on Wednesday, driven by demand in its high-margin software unit as businesses ramped up IT spending, sending its shares soaring about 10% in extended trading.
The company made its “Granite” family of AI models open-source in May, in contrast to rivals such as Microsoft, which charge for access to their models. He, however, declined to provide details on whether IBM plans to offer DeepSeek’s models on its Watsonx platform, which allows users to enhance code for AI programs or deploy chatbots.
Companies have focused spending on longer-term consulting deals, centred around integrating AI in their businesses, which is yet to be reflected in IBM’s revenue.
AI SOFTWARE PROFIT OPEN-SOURCE CLOUD INFRASTRUCTURE
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