IBM CEO Arvind Krishna told investors that open-weight models are now highly competitive, delivering 90% of the performance of closed frontier models at 10% of the token cost. He noted the performance gap has narrowed significantly from a 70-to-20/30 score spread to closer to 70-to-50. Krishna argued that for most enterprise tasks—summarizing emails, analyzing contracts, answering calls—open models are sufficient and far more economical.
He warned that while most businesses can build useful AI in two or three racks, many will struggle with kernel engineering, network configuration, GPU clustering, and caching. IBM plans to ease this with new software and predicts strong demand for its Spyre mainframe accelerator cards. The z17 mainframe has already generated $1bn more revenue than prior models, though overall mainframe revenue fell 20% year-over-year.
IBM’s infrastructure revenue grew 5% to $3.7B, software rose 9% to $7.8B, and Red Hat surged 11% with $800M in new virtualization deals. Total quarterly revenue reached $17.1 billion, up 5%, but shares dipped slightly in after-hours trading. Separately, IBM Cloud suffered a severity-one outage due to “emergency maintenance,” disrupting provisioning for 90 minutes and expected to last over 16 hours.
Source: Hacker News · Summarized by HeadlinesBriefing