IBM CEO says there is 'no way' spending on AI data centers will pay off

Post by mattlondon » Wed, Dec 03, 2025, 2:51 PM UTC

evanjrowley wrote: post #786

mattlondon wrote: post #771

Earlier quoted context omitted.

Take this "sober" analysis with a big pinch of salt. IBM have totally missed the AI boat, and a large chunk of their revenue comes from selling expensive consultants to clients who do not have the expertise to do IT work themselves - this business model is at a high risk of being disrupted by those clients just using AI agents instead of paying $2-5000/day for a team of 20 barely-qualified new-grads in some far-off c…

Is this true in 2025? Asking because the biggest IT consulting branch of IBM, Global Technology Services (GTS), was spun off into Kyndryl back in 2021[0]. Same goes for some premier software products (including one I consulted for) back in 2019[1]. Anecdotal evidence suggests the consulting part of IBM was already significantly smaller than in the past. It's worth noting that IBM may view these AI companies as compet…

Post by cubefox » Wed, Dec 03, 2025, 2:53 PM UTC

Patrick_Devine wrote: post #202

lithos wrote: post #121

Earlier quoted context omitted.

It's worse than that in reality, AI chips are on a two year cadence for backwards compatibility (NVIDIA can basically guarantee it, and you probably won't be able to pay real AI devs enough to stick around to make hardware work arounds). So their accounting is optimistic.

5 years is normal-ish depreciation time frame. I know they are gaming GPUs, but the RTX 3090 came out ~ 4.5 years before the RTX 5090. The 5090 has double the performance and 1/3 more memory. The 3090 is still a useful card even after 5 years.

Post by vablings » Wed, Dec 03, 2025, 2:58 PM UTC

ramoz wrote: post #703

bloppe wrote: post #590

Earlier quoted context omitted.

Would you mind sharing some of these projects? I've found Claude's usefulness is highly variable, though somewhat predictable. It can write `jq` filters flawlessly every time, whereas I would normally spend 30 minutes scanning docs because nobody memorizes `jq` syntax. And it can comb through server logs in every pod of my k8s clusters extremely fast. But it often struggles making quality code changes in a large code…

At the end of this week we are releasing https://github.com/eqtylab/cupcake You can see all of Claude’s commits. I’ve shipped so much with ai. Favorite has been metrics dashboards of various kinds - across life and business.

Post by tw04 » Wed, Dec 03, 2025, 3:01 PM UTC

mattlondon wrote: post #771

blablabla123 wrote: post #533

Despite the flashy title that's the first "sober" analysis from a CEO I read about the technology. While not even really news, it's also worth mentioning that the energy requirements are impossible to fulfill Also now using ChatGPT intensely since months for all kinds of tasks and having tried Claude etc. None of this is on par with a human. The code snippets are straight out of Stackoverflow...

Take this "sober" analysis with a big pinch of salt. IBM have totally missed the AI boat, and a large chunk of their revenue comes from selling expensive consultants to clients who do not have the expertise to do IT work themselves - this business model is at a high risk of being disrupted by those clients just using AI agents instead of paying $2-5000/day for a team of 20 barely-qualified new-grads in some far-off c…

Post by Aperocky » Wed, Dec 03, 2025, 3:02 PM UTC

kelnos wrote: post #617

Aperocky wrote: post #522

Earlier quoted context omitted.

The other way to look at it is that the entire consulting industry is teetering on catastrophe. And IBM, being largely a consulting company now, is not being spared.

IBM isn't failing, though. They're a profitable company with healthy margins, and enterprises continue to hire them for all sorts of things, in large numbers.