IBM Vice Chairman Gary Cohn: Our software is not being disrupted by AI
Speakers
Gary Cohn
— Vice Chair, IBM / Former NEC Director
Summary
IBM Vice Chairman Gary Cohn discusses the company's recent pre-announcement and stock decline. He argues the selloff is temporary, driven by a rebalancing of IT budgets as firms overspent on AI tokens and are now reassessing ROI, which could shift spending back to enterprise infrastructure. He highlights that IBM's quantum computing business remains strong and that its core software is not being disrupted by AI. He also notes construction cost inflation from data center builds.
- IBM's stock pullback attributed to temporary IT budget rebalancing, not fundamental weakness
- Quantum computing developments and government foundry deal continue to perform well
- Companies overspent on AI tokens, leading to paused enterprise infrastructure deals
- Growing scrutiny of AI token ROI may redirect spending to traditional enterprise infrastructure
- IBM's software is seen as resilient against AI disruption
- Data center construction boom is causing labor cost inflation in the broader construction sector
Ideas
IBM pullback temporary; quantum business intact.
IBM's recent stock decline is temporary. The prior rally was driven by quantum computing developments (government quantum foundry deal) that remain on track. The current pause in enterprise infrastructure deals is due to temporary IT budget rebalancing: companies overspent on AI tokens and are now pausing, but they are beginning to question AI token ROI and may shift spending back to traditional enterprise infrastructure, benefiting IBM's core business.
