IBM just dropped its Q1 2025 earnings, and AI is front and center. CEO Arvind Krishna made it clear: IBM’s hybrid cloud and AI strategy isn’t just working; it’s gaining serious ground.
$6 Billion and Growing
Generative AI is driving the momentum. IBM’s book of business in this area has passed $6 billion since inception, with more than $1 billion added in just the last quarter. About 80% of that comes from Consulting, the rest from Software. This split is consistent with previous quarters.
Real Tools, Real Use Cases
IBM isn’t just selling hype. The company has built a broad AI portfolio aimed at real enterprise needs. In Software, clients are deploying AI assistants, agents, and middleware in hybrid environments. Multimodal capabilities — AI that can handle text, image, and more — are helping clients unlock more value.
Krishna emphasized that AI agents are accelerating enterprise transformation. On the ground, Consulting is making it happen, helping businesses design strategies and implement AI in ways that actually move the needle.
Infrastructure Joins the AI Push
Even IBM’s Infrastructure business is seeing more AI traction. The upcoming z17 mainframe is built with AI in mind, offering stronger multimodal capabilities, better power efficiency, higher performance, and new AI-powered tools. It’s a clear sign IBM sees AI not as a layer, but as a core capability across its stack.
ROI is the New North Star
CFO James Kavanaugh pointed out that around 6 points of IBM’s software growth were organic, driven by products like Watsonx and AI assistants. In Consulting, the generative AI book of business alone has topped $5 billion.
But it’s not just about growth. Krishna noted a shift in client conversations — from curiosity to ROI. Clients want to see how AI can streamline operations and enhance customer experience. One client, for example, is targeting 30% savings in back-office finance processes with AI.
The Big Picture
IBM’s message is simple: AI needs to deliver. The company’s approach — ROI-driven, hybrid-cloud compatible, and enterprise-ready — is resonating. Whether it’s in Software, Consulting, or Infrastructure, IBM is betting big on generative AI. So far, that bet looks like it’s paying off.