IBM CEO Claims Only 2% of Software at Risk From AI Replacement
IBM CEO Arvind Krishna has stated that only 2% of the company's software is vulnerable to being replaced by applications built using artificial intelligence models. This claim comes amid a period where IBM shares have experienced significant volatility, including their worst single-day drop in over a century and currently trading near a 52-week low. Krishna emphasized during an earnings call that most of IBM’s revenue—particularly from infrastructure software—is essential for AI tools to function effectively. Software accounts for about $7.76 billion or roughly 45% of the company's second-quarter revenue, with only around $155 million per quarter at risk according to his estimate. Despite Krishna's confidence in IBM’s strategy and execution challenges rather than strategic missteps being blamed for recent underperformance, Wall Street analysts have lowered their price targets. The CEO also noted that a significant portion of delayed deals from the second quarter had already been closed by July.
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