IBM: The Overlooked AI Leader with a $7.5 Billion Business and Surging Free Cash Flow

IBM is a profitable yet overlooked player in the AI industry, focusing on providing enterprise clients with solutions through consulting services, software, and hardware. The company has secured over $7.5 billion in business since launching its generative AI strategy, with 80% coming from consulting and the rest from software. IBM's AI models, such as Granite, are designed for speed, safety, and cost-effectiveness. The company's mainframe business also brings significant AI firepower, with the z17 model handling 450 billion AI inferencing operations per day. IBM's strategy is less dependent on exponential AI gains and should remain strong even if the AI frenzy cools off.

IBM, a long-standing technology giant, has quietly carved out a niche for itself in the AI industry, focusing on enterprise clients through its consulting services, software, and hardware. Despite its significant contributions, IBM remains an underrated player in the AI landscape.

IBM's AI strategy has been remarkably successful, securing over $7.5 billion in business since its launch. This figure includes 80% from consulting services and the remaining 20% from software solutions. The company's AI models, such as Granite, are designed to prioritize speed, safety, and cost-effectiveness, making them highly attractive to enterprise clients [1].

The company's mainframe business also brings substantial AI firepower. The z17 model, for instance, handles 450 billion AI inferencing operations per day. This capability underscores IBM's commitment to integrating AI into its core technologies, thereby enhancing its offerings for enterprise clients [2].

IBM's AI strategy is less dependent on the hype surrounding exponential AI gains. Instead, it focuses on practical, real-world applications that deliver tangible benefits to its clients. This approach ensures that IBM's AI business remains strong, even as the AI frenzy may cool off in the future.

In contrast to other AI players, IBM's AI solutions are more about delivering value to enterprise clients rather than chasing the latest AI models or infrastructure providers. This focus on enterprise needs and practical applications has allowed IBM to build a robust and profitable AI business.

IBM's AI strategy is not without its challenges. The company faces intense competition from other AI players, such as Microsoft and Nvidia. However, IBM's unique combination of consulting, software, and hardware solutions gives it a competitive edge. By providing integrated AI solutions tailored to enterprise needs, IBM has carved out a profitable niche in the AI industry.

In conclusion, IBM is a profitable yet overlooked player in the AI industry. Its focus on enterprise clients, practical AI solutions, and integrated hardware and software offerings sets it apart from other AI players. As the AI industry continues to evolve, IBM's strategic approach may prove to be a sustainable path to success.

References:
[1] https://www.ainvest.com/news/ai-strategy-ibm-moment-drive-open-standards-global-leadership-2508/
[2] https://www.capgemini.com/insights/expert-perspectives/reintroducing-ibm-z-a-platform-for-the-age-of-enterprise-ai/