IBM's AI business is booming, and here's why
IBM (IBM) reported better-than-expected earnings for the fourth quarter of 2023, beating analysts' estimates on both revenue and earnings per share. The company's stock soared more than 10% in after-hours trading, as investors cheered the strong performance of its cloud and artificial intelligence (AI) segments.
IBM has been investing heavily in AI, especially in its Watson platform, which offers a range of services and solutions for various industries and domains. Watson is widely used for natural language processing, computer vision, data analytics, machine learning, and more. IBM claims that Watson can help businesses improve their decision making, optimize their operations, enhance their customer experience, and drive innovation.
One of the key drivers of IBM's AI growth is the increasing demand for AI-powered automation. According to a recent report by IDC, the global spending on AI systems will reach $97.9 billion in 2023, up from $37.5 billion in 2019. The report also predicts that AI will automate 50% of IT tasks by 2024, and 20% of business tasks by 2025.
IBM is well-positioned to capitalize on this trend, as it offers a comprehensive portfolio of AI solutions for automation. For example, IBM Cloud Pak for Automation is a platform that enables enterprises to automate their workflows, processes, decisions, and content across hybrid cloud environments. IBM Cloud Pak for Automation leverages Watson's capabilities to provide intelligent automation with natural language understanding, document processing, conversational AI, and more.
Another example is IBM Watson AIOps, which is a solution that helps IT teams automate the detection and resolution of IT issues using AI. IBM Watson AIOps uses data from various sources, such as logs, metrics, tickets, and alerts, to identify anomalies and root causes, and to suggest actions and solutions. IBM Watson AIOps also integrates with other tools and platforms, such as Slack, ServiceNow, Red Hat OpenShift, and more.
IBM's AI business is not only growing in terms of revenue, but also in terms of customer base and partnerships. The company announced that it has added more than 2,800 new AI customers in 2023, including AT&T, Bank of America, Lufthansa, Siemens, and more. IBM also expanded its strategic partnerships with Adobe, Salesforce, SAP, and others, to integrate its AI solutions with their platforms and offerings.
IBM's CEO Arvind Krishna said that the company's AI strategy is paying off, and that he expects the momentum to continue in 2024 and beyond. He said that IBM is "the leader in enterprise AI", and that it is "helping our clients become cognitive enterprises". He also said that IBM is "at the forefront of the next wave of innovation", and that it is "driving the future of hybrid cloud and AI".