IBM's board faced bleak second-quarter news, grappling with the accelerating impact of the AI revolution on their business. They debated issuing a rare profit warning or waiting for the official earnings release. Ultimately, the board, after questioning CEO Arvind Krishna, opted for transparency, choosing to disclose disappointing results preemptively to regain investor credibility.

"This quarter we faltered," Krishna stated in an investor letter released just before market open. The consequences were immediate and severe, with IBM's stock plummeting 25%, marking its worst trading day in its century-old history. The tech giant, known for its historical contributions to space exploration, social security systems, and even beating champions on "Jeopardy!" with its supercomputer, Watson, is now confronting the harsh realities of the current AI boom.