Published on November 16, 2023, 7:35 pm

IBM’s generative artificial intelligence (GenAI) business is rapidly growing, approaching a $1-billion annualized run rate. This surge in demand reflects customers’ increasing interest in IBM’s expertise in utilizing this groundbreaking technology for code modernization, customer service improvement, and digital labor optimization.

During IBM’s Q3 earnings call, CEO Arvind Krishna deviated from his usual practice of providing an overview of all key business units to focus specifically on the significant developments surrounding GenAI. Although Krishna did not explicitly mention a $1-billion run rate, it can be inferred from his comments that the business is trending towards that milestone.

Krishna stated in his prepared remarks that IBM’s generative AI book of business in Q3 amounted to “low hundreds of millions of dollars.” This figure indicates a strong foundation for future growth. Krishna also mentioned the growing interest in GenAI and highlighted the thousands of hands-on interactions with clients that are setting the stage for future opportunities with Watsonx—an advanced AI studio for training and deploying AI models.

One noteworthy aspect of Krishna’s comments is the involvement of both large and smaller clients in these hands-on engagements. To establish GenAI as a truly transformative technology rather than just hype, it needs to appeal to companies across various sizes and industries. IBM exemplified this inclusivity by showcasing how Dun & Bradstreet leveraged their consulting and software capabilities, driven by watsonx, to create proprietary generative AI solutions for their own clients.

As IBM CEO Arvind Krishna approaches his fourth year at the helm, it becomes evident that he has made substantial progress in streamlining IBM’s diverse portfolio. Under his leadership, IBM has experienced remarkable growth not only with its billion-dollar GenAI business but also across three foundational segments—code modernization, customer service improvement, and digital labor optimization—where customers seek IBM’s unique expertise.

Krishna emphasized the emerging patterns within enterprise AI use cases and highlighted the three areas that have gained prominence due to their broad relevance and tangible business benefits. As IBM navigates its transformation, these market segments present lucrative opportunities for leveraging GenAI’s capabilities and driving further growth.

With the accelerating evolution of AI ecosystems and a renewed focus on customer-centric co-creation, IBM invites professionals to join the AI Ecosystem Course at Acceleration Economy. This event, scheduled for December 14th, explores how AI has revolutionized partnerships and reimagined what is possible in various industries. Register now to be part of this transformative experience.

In conclusion, IBM’s generative AI business is rapidly gaining momentum, nearing a $1-billion run rate. The company’s expertise in applying GenAI technology for various use cases has captivated both large and smaller clients alike. With a focus on code modernization, customer service enhancement, and digital labor optimization, IBM is well-positioned to leverage its unique capabilities and drive continued growth in the evolving AI landscape.

Note: This article was inspired by an original post from Acceleration Economy titled “IBM Generative AI Business Nears $1 Billion Run Rate.”

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