May 6, 2025 • 9 mins
IBM Chief Executive Arvind Krishna says the tech giant has doubled down on the use of artificial intelligence. He speaks with Bloomberg's Caroline Hyde.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News. We're going to go
to what's happening with IBM. I'm pleased to welcome the
CEO of Vin Krishno, who's coming from the Companies Think Conference,
an annual event, and Avin, I'm just excited to hear
really from you the pace of change that's happening with
Agenda AAI. I think you put out there that in
(00:23):
three years time there's going to be one billion apps.
It is so noisy, it is cluttered. How are you
may managing to streamline it for your customers?
Speaker 2 (00:33):
Look first, I think that number is the really interesting number.
A billion new applications using AI for a third of
them using agentic AI. And the way that we are
approaching it is, how do we make it easy for
our customers leverage their own data, insert their own data
into the models, and then leverage it to make the
(00:53):
enterprise a lot more productive. That's what we're after building,
and that's what we're just announced with our watsonex hocice
straight with agentic capabilities, including one hundred and fifty new agents,
some from us and some from our partners.
Speaker 1 (01:09):
One hundred and fifty agents sounds an extraordinary number of it.
And look, you've got a big book of business already
when it comes to generative AI six billion dollars in growing.
But how much are you seeing the CEOs you serve
pushing back on overwhelm. How are you managing to help
them navigate what feels like in some ways a less
than productive environment for the amount that they're investing in
(01:31):
generative AI.
Speaker 2 (01:34):
Look, I think that what CEOs are concerned about is
that now that you have gone, the era of extraventation,
as I call it, is over. Now people are looking
for business value on AI. As they're doing that, they've
discovered that about twenty five percent of the time these
projects are paying off very well for them. So learn
from that twenty five and then figure out what are
(01:55):
they enhabitor as in the other seventy five and take
those out, and those are in variably there's fragmentation in
the environment. So how do you have a more integrated environment.
You've got to make sure that there is value in
the AI projects. Don't just do an experiment and leave
it on the shelf. You've got to scale it and
deploy it across the enterprise. So how do you integrate?
(02:17):
How do you create the right hybrid environment. That's what
we're helping them with, and then we believe that twenty
five we'll go all the way up to fifty or
seventy five, at which point that's a great return for
the CEOs.
Speaker 1 (02:29):
That software that you're unveiling, those consulting offerings that you
continue to provide of in at the moment. How much
is that bearing fruit in this current environment? How willing
are these CEOs to experiment and move on from experimentation
when we've got a really uncertain economy on our hands.
Speaker 2 (02:45):
Look, I'm a more of an optimist on the uses
of technology in the current environment than a pessimist. And
why do I say that. So when you have supply
chain issues, you have cost issues, you have productive issues,
technology becomes an answer to help you scale the business
without having to add a lot of physical cost into
(03:07):
the business. So I find the appetite of the CEOs
is quite high to spend on technology as long as
they can see a return that is our college short
to medium term meaning six months, twelve months, eighteen months.
I find people leaning in very heavily, and I think
that's why you see enterprise tech spending has remained robust
despite all of these issues that could be talked about.
Speaker 1 (03:30):
What about government in the moment Scott beson getting grilled
on a hill at the moment around DOGE and that
has had implications for your own business. I think it's
about fifteen contracts we understand having canceled. Are more to come.
Are you seeing an end to that cancelation process.
Speaker 2 (03:48):
I actually choose not to get worried about dos. I
think that the areas where we have very robust contracts,
when we're helping the VA process claims, we help the GSA,
say on expense management, we help the DD on payroll,
those remained very robust, and I don't believe that those
(04:08):
will come under any significant attack. Areas which do come
under attack are much more what I call discretionary, or
are much more time and material or labor augmentation based.
Those may come under attack. It actually does not worry
in me. I believe that even if those come under attack,
there is more than enough offset from the areas that
are more critical interesting.
Speaker 1 (04:29):
So basically any cancelations will be outweighed by business that
you potentially can win within the government as well.
Speaker 2 (04:38):
I believe that from having talked to very senior members
of the administration, there is a huge appetite to use
technology to modernize government and to help make government itself
more efficient. You can't achieve efficiency just based on cost cutting.
You actually also will have to invest in technology. And
I believe, and not just my belief from how spoken
(05:00):
to them, they have an appetite to do that.
Speaker 1 (05:03):
I'll tell you where there's appetite. Air traffic control and
Trump himself talking about maybe raythean IBM coming in to
help solve some of the real anxieties we've got just
a loss of radar over happening in Newark? Is that progressing? Ovin?
Are you able to share on how any sort of
contract might shape up?
Speaker 2 (05:20):
Look, I don't want to talk about any specific contract
or any specific agency, but I think what he just
pointed out is a great example where technology will be
part of the answer. Better integration, better computing capabilities, better
communication capabilities, all of those will play a role because
right now we are living on not exactly but essentially,
(05:44):
I'll let's call it a slightly evolved system that was
built in the nineteen seventies.
Speaker 1 (05:49):
Ovin, what's crucial about air traffic control is accuracy, and
I know that's almost where everyone's eyes are when it
comes to a GENTERKI when it comes to generative AI,
is the risk of the underlying data being inaccurate and
how that compounds? How are you managing to tackle that
sort of area of anxiety and reality.
Speaker 2 (06:09):
I always break the problem down. The core of air
traffic control has to be built on very precise data,
completely accurate data. You're not going to go use agentic
AI to estimate where a plane is. That's going to
be based on much more physics and hard engineering. Now,
(06:29):
could agentic AI come in trying to optimize routes in
worrying about how do you increase the total flow and
capacity at an airport? Perhaps? But I'm using the word
perhaps because there's a lot of careful work to be
done there. But could agentic AI be used to process
claims faster at Social Security or the VA? Absolutely, and
(06:51):
then you make citizens happier, you deliver them services faster
at a lower cost. That's where I would go first
with agent KI.
Speaker 1 (07:00):
In the private sector, they're looking for accuracy and that's
something you're offering at the moment. How much is you
just seeing the adoption and the use and productive use
of agenda KI being limited by that underlying data right now,
or is that something that we're streamlining already.
Speaker 2 (07:16):
I albit advise our clients start with the use cases
where you can live with some risk, where you do
not need it to be one hundred percent accurate. So
if you think about customer service, you think about end
client experience. I think about our internal IT help lists.
Those are all areas where where you were dealing with
(07:38):
people you actually had a ten or fifteen percent errorrate.
So now that you deal with the AAI, you can
actually have a lower error than that, but maybe not perfect,
but you can still live with it.
Speaker 1 (07:50):
Think is all about innovation. I'm looking at the car
behind you. I'm thinking about the way in which you're
also pushing the agenda, not only when it comes to hybrid,
when it comes to on when you thinking about the
innovations you're making on mainframes, but quantum A You're getting
a lot of questions on quantum right now. Scott Beson
wants the US to lead in AI but also in
quantum computing. How is that making a difference in your
(08:12):
business right now?
Speaker 2 (08:14):
So we are very very pleased with the innovation we
brought out here. We talked about the AGENTAAI. We just
mentioned the mainframe. We can do four hundred and fifty
billion AI inferences per day on the latest mainframe we
just announced this quarter, the Z seventeen. Think about using
that in financial systems to help reduce fraud. So that's
(08:35):
an incredible area of innovation on quantum. Part of the
reason we announced the huge investment last year and into quantum,
and we just brought out the quantum system to this
year is because we are very excited where that will go.
That's an area in which we believe the US must
and can lead on quantum computing, both for national security,
(08:57):
but also for competitive advantage and for growing a business.
Speaker 1 (09:01):
And is that a competitive advantage continue to grow here
in the United States. You've just unveiled a huge amount
of investment into the US.
Speaker 2 (09:09):
Yes, So we put one hundred and fifty billion dollars
here into the US because we believe that if I
look at AI, I look at hybrid cloud, and I
look at quantum coming, the growth opportunities are here. So
we want to invest to take advantage of these opportunities.
Speaker 1 (09:27):
IBM Chairman President CEO Arvin Christian and live from think
We very much appreciate your time today
Bloomberg Audio Studios, Podcasts, radio News. We're going to go
to what's happening with IBM. I'm pleased to welcome the
CEO of Vin Krishno, who's coming from the Companies Think Conference,
an annual event, and Avin, I'm just excited to hear
really from you the pace of change that's happening with
Agenda AAI. I think you put out there that in
(00:23):
three years time there's going to be one billion apps.
It is so noisy, it is cluttered. How are you
may managing to streamline it for your customers?
Speaker 2 (00:33):
Look first, I think that number is the really interesting number.
A billion new applications using AI for a third of
them using agentic AI. And the way that we are
approaching it is, how do we make it easy for
our customers leverage their own data, insert their own data
into the models, and then leverage it to make the
(00:53):
enterprise a lot more productive. That's what we're after building,
and that's what we're just announced with our watsonex hocice
straight with agentic capabilities, including one hundred and fifty new agents,
some from us and some from our partners.
Speaker 1 (01:09):
One hundred and fifty agents sounds an extraordinary number of it.
And look, you've got a big book of business already
when it comes to generative AI six billion dollars in growing.
But how much are you seeing the CEOs you serve
pushing back on overwhelm. How are you managing to help
them navigate what feels like in some ways a less
than productive environment for the amount that they're investing in
(01:31):
generative AI.
Speaker 2 (01:34):
Look, I think that what CEOs are concerned about is
that now that you have gone, the era of extraventation,
as I call it, is over. Now people are looking
for business value on AI. As they're doing that, they've
discovered that about twenty five percent of the time these
projects are paying off very well for them. So learn
from that twenty five and then figure out what are
(01:55):
they enhabitor as in the other seventy five and take
those out, and those are in variably there's fragmentation in
the environment. So how do you have a more integrated environment.
You've got to make sure that there is value in
the AI projects. Don't just do an experiment and leave
it on the shelf. You've got to scale it and
deploy it across the enterprise. So how do you integrate?
(02:17):
How do you create the right hybrid environment. That's what
we're helping them with, and then we believe that twenty
five we'll go all the way up to fifty or
seventy five, at which point that's a great return for
the CEOs.
Speaker 1 (02:29):
That software that you're unveiling, those consulting offerings that you
continue to provide of in at the moment. How much
is that bearing fruit in this current environment? How willing
are these CEOs to experiment and move on from experimentation
when we've got a really uncertain economy on our hands.
Speaker 2 (02:45):
Look, I'm a more of an optimist on the uses
of technology in the current environment than a pessimist. And
why do I say that. So when you have supply
chain issues, you have cost issues, you have productive issues,
technology becomes an answer to help you scale the business
without having to add a lot of physical cost into
(03:07):
the business. So I find the appetite of the CEOs
is quite high to spend on technology as long as
they can see a return that is our college short
to medium term meaning six months, twelve months, eighteen months.
I find people leaning in very heavily, and I think
that's why you see enterprise tech spending has remained robust
despite all of these issues that could be talked about.
Speaker 1 (03:30):
What about government in the moment Scott beson getting grilled
on a hill at the moment around DOGE and that
has had implications for your own business. I think it's
about fifteen contracts we understand having canceled. Are more to come.
Are you seeing an end to that cancelation process.
Speaker 2 (03:48):
I actually choose not to get worried about dos. I
think that the areas where we have very robust contracts,
when we're helping the VA process claims, we help the GSA,
say on expense management, we help the DD on payroll,
those remained very robust, and I don't believe that those
(04:08):
will come under any significant attack. Areas which do come
under attack are much more what I call discretionary, or
are much more time and material or labor augmentation based.
Those may come under attack. It actually does not worry
in me. I believe that even if those come under attack,
there is more than enough offset from the areas that
are more critical interesting.
Speaker 1 (04:29):
So basically any cancelations will be outweighed by business that
you potentially can win within the government as well.
Speaker 2 (04:38):
I believe that from having talked to very senior members
of the administration, there is a huge appetite to use
technology to modernize government and to help make government itself
more efficient. You can't achieve efficiency just based on cost cutting.
You actually also will have to invest in technology. And
I believe, and not just my belief from how spoken
(05:00):
to them, they have an appetite to do that.
Speaker 1 (05:03):
I'll tell you where there's appetite. Air traffic control and
Trump himself talking about maybe raythean IBM coming in to
help solve some of the real anxieties we've got just
a loss of radar over happening in Newark? Is that progressing? Ovin?
Are you able to share on how any sort of
contract might shape up?
Speaker 2 (05:20):
Look, I don't want to talk about any specific contract
or any specific agency, but I think what he just
pointed out is a great example where technology will be
part of the answer. Better integration, better computing capabilities, better
communication capabilities, all of those will play a role because
right now we are living on not exactly but essentially,
(05:44):
I'll let's call it a slightly evolved system that was
built in the nineteen seventies.
Speaker 1 (05:49):
Ovin, what's crucial about air traffic control is accuracy, and
I know that's almost where everyone's eyes are when it
comes to a GENTERKI when it comes to generative AI,
is the risk of the underlying data being inaccurate and
how that compounds? How are you managing to tackle that
sort of area of anxiety and reality.
Speaker 2 (06:09):
I always break the problem down. The core of air
traffic control has to be built on very precise data,
completely accurate data. You're not going to go use agentic
AI to estimate where a plane is. That's going to
be based on much more physics and hard engineering. Now,
(06:29):
could agentic AI come in trying to optimize routes in
worrying about how do you increase the total flow and
capacity at an airport? Perhaps? But I'm using the word
perhaps because there's a lot of careful work to be
done there. But could agentic AI be used to process
claims faster at Social Security or the VA? Absolutely, and
(06:51):
then you make citizens happier, you deliver them services faster
at a lower cost. That's where I would go first
with agent KI.
Speaker 1 (07:00):
In the private sector, they're looking for accuracy and that's
something you're offering at the moment. How much is you
just seeing the adoption and the use and productive use
of agenda KI being limited by that underlying data right now,
or is that something that we're streamlining already.
Speaker 2 (07:16):
I albit advise our clients start with the use cases
where you can live with some risk, where you do
not need it to be one hundred percent accurate. So
if you think about customer service, you think about end
client experience. I think about our internal IT help lists.
Those are all areas where where you were dealing with
(07:38):
people you actually had a ten or fifteen percent errorrate.
So now that you deal with the AAI, you can
actually have a lower error than that, but maybe not perfect,
but you can still live with it.
Speaker 1 (07:50):
Think is all about innovation. I'm looking at the car
behind you. I'm thinking about the way in which you're
also pushing the agenda, not only when it comes to hybrid,
when it comes to on when you thinking about the
innovations you're making on mainframes, but quantum A You're getting
a lot of questions on quantum right now. Scott Beson
wants the US to lead in AI but also in
quantum computing. How is that making a difference in your
(08:12):
business right now?
Speaker 2 (08:14):
So we are very very pleased with the innovation we
brought out here. We talked about the AGENTAAI. We just
mentioned the mainframe. We can do four hundred and fifty
billion AI inferences per day on the latest mainframe we
just announced this quarter, the Z seventeen. Think about using
that in financial systems to help reduce fraud. So that's
(08:35):
an incredible area of innovation on quantum. Part of the
reason we announced the huge investment last year and into quantum,
and we just brought out the quantum system to this
year is because we are very excited where that will go.
That's an area in which we believe the US must
and can lead on quantum computing, both for national security,
(08:57):
but also for competitive advantage and for growing a business.
Speaker 1 (09:01):
And is that a competitive advantage continue to grow here
in the United States. You've just unveiled a huge amount
of investment into the US.
Speaker 2 (09:09):
Yes, So we put one hundred and fifty billion dollars
here into the US because we believe that if I
look at AI, I look at hybrid cloud, and I
look at quantum coming, the growth opportunities are here. So
we want to invest to take advantage of these opportunities.
Speaker 1 (09:27):
IBM Chairman President CEO Arvin Christian and live from think
We very much appreciate your time today
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