Bloomberg Audio Studios, Podcasts, radio News. We're going to go to what's happening with IBM. I'm pleased to welcome the CEO of Vin Krishno, who's coming from the Companies Think Conference, an annual event, and Avin, I'm just excited to hear really from you the pace of change that's happening with Agenda AAI. I think you put out there that in three years time there's going to be one billion apps. It is so noisy, it is cluttered. How are you may managing to streamline it for your customers?

Bloomberg Audio Studios, Podcasts, radio News. We're going to go to what's happening with IBM. I'm pleased to welcome the CEO of Vin Krishno, who's coming from the Companies Think Conference, an annual event, and Avin, I'm just excited to hear really from you the pace of change that's happening with Agenda AAI. I think you put out there that in three years time there's going to be one billion apps. It is so noisy, it is cluttered. How are you may managing to streamline it for your customers?

Look first, I think that number is the really interesting number. A billion new applications using AI for a third of them using agentic AI. And the way that we are approaching it is, how do we make it easy for our customers leverage their own data, insert their own data into the models, and then leverage it to make the enterprise a lot more productive. That's what we're after building, and that's what we're just announced with our watsonex hocice straight with agentic capabilities, including one hundred and fifty new agents, some from us and some from our partners.

Look first, I think that number is the really interesting number. A billion new applications using AI for a third of them using agentic AI. And the way that we are approaching it is, how do we make it easy for our customers leverage their own data, insert their own data into the models, and then leverage it to make the enterprise a lot more productive. That's what we're after building, and that's what we're just announced with our watsonex hocice straight with agentic capabilities, including one hundred and fifty new agents, some from us and some from our partners.

One hundred and fifty agents sounds an extraordinary number of it. And look, you've got a big book of business already when it comes to generative AI six billion dollars in growing. But how much are you seeing the CEOs you serve pushing back on overwhelm. How are you managing to help them navigate what feels like in some ways a less than productive environment for the amount that they're investing in generative AI.

One hundred and fifty agents sounds an extraordinary number of it. And look, you've got a big book of business already when it comes to generative AI six billion dollars in growing. But how much are you seeing the CEOs you serve pushing back on overwhelm. How are you managing to help them navigate what feels like in some ways a less than productive environment for the amount that they're investing in generative AI.

Look, I think that what CEOs are concerned about is that now that you have gone, the era of extraventation, as I call it, is over. Now people are looking for business value on AI. As they're doing that, they've discovered that about twenty five percent of the time these projects are paying off very well for them. So learn from that twenty five and then figure out what are they enhabitor as in the other seventy five and take those out, and those are in variably there's fragmentation in the environment. So how do you have a more integrated environment. You've got to make sure that there is value in the AI projects. Don't just do an experiment and leave it on the shelf. You've got to scale it and deploy it across the enterprise. So how do you integrate? How do you create the right hybrid environment. That's what we're helping them with, and then we believe that twenty five we'll go all the way up to fifty or seventy five, at which point that's a great return for the CEOs.

Look, I think that what CEOs are concerned about is that now that you have gone, the era of extraventation, as I call it, is over. Now people are looking for business value on AI. As they're doing that, they've discovered that about twenty five percent of the time these projects are paying off very well for them. So learn from that twenty five and then figure out what are they enhabitor as in the other seventy five and take those out, and those are in variably there's fragmentation in the environment. So how do you have a more integrated environment. You've got to make sure that there is value in the AI projects. Don't just do an experiment and leave it on the shelf. You've got to scale it and deploy it across the enterprise. So how do you integrate? How do you create the right hybrid environment. That's what we're helping them with, and then we believe that twenty five we'll go all the way up to fifty or seventy five, at which point that's a great return for the CEOs.

That software that you're unveiling, those consulting offerings that you continue to provide of in at the moment. How much is that bearing fruit in this current environment? How willing are these CEOs to experiment and move on from experimentation when we've got a really uncertain economy on our hands.

That software that you're unveiling, those consulting offerings that you continue to provide of in at the moment. How much is that bearing fruit in this current environment? How willing are these CEOs to experiment and move on from experimentation when we've got a really uncertain economy on our hands.

Look, I'm a more of an optimist on the uses of technology in the current environment than a pessimist. And why do I say that. So when you have supply chain issues, you have cost issues, you have productive issues, technology becomes an answer to help you scale the business without having to add a lot of physical cost into the business. So I find the appetite of the CEOs is quite high to spend on technology as long as they can see a return that is our college short to medium term meaning six months, twelve months, eighteen months. I find people leaning in very heavily, and I think that's why you see enterprise tech spending has remained robust despite all of these issues that could be talked about.

Look, I'm a more of an optimist on the uses of technology in the current environment than a pessimist. And why do I say that. So when you have supply chain issues, you have cost issues, you have productive issues, technology becomes an answer to help you scale the business without having to add a lot of physical cost into the business. So I find the appetite of the CEOs is quite high to spend on technology as long as they can see a return that is our college short to medium term meaning six months, twelve months, eighteen months. I find people leaning in very heavily, and I think that's why you see enterprise tech spending has remained robust despite all of these issues that could be talked about.

What about government in the moment Scott beson getting grilled on a hill at the moment around DOGE and that has had implications for your own business. I think it's about fifteen contracts we understand having canceled. Are more to come. Are you seeing an end to that cancelation process.

What about government in the moment Scott beson getting grilled on a hill at the moment around DOGE and that has had implications for your own business. I think it's about fifteen contracts we understand having canceled. Are more to come. Are you seeing an end to that cancelation process.

I actually choose not to get worried about dos. I think that the areas where we have very robust contracts, when we're helping the VA process claims, we help the GSA, say on expense management, we help the DD on payroll, those remained very robust, and I don't believe that those will come under any significant attack. Areas which do come under attack are much more what I call discretionary, or are much more time and material or labor augmentation based. Those may come under attack. It actually does not worry in me. I believe that even if those come under attack, there is more than enough offset from the areas that are more critical interesting.

I actually choose not to get worried about dos. I think that the areas where we have very robust contracts, when we're helping the VA process claims, we help the GSA, say on expense management, we help the DD on payroll, those remained very robust, and I don't believe that those will come under any significant attack. Areas which do come under attack are much more what I call discretionary, or are much more time and material or labor augmentation based. Those may come under attack. It actually does not worry in me. I believe that even if those come under attack, there is more than enough offset from the areas that are more critical interesting.

So basically any cancelations will be outweighed by business that you potentially can win within the government as well.

So basically any cancelations will be outweighed by business that you potentially can win within the government as well.

I believe that from having talked to very senior members of the administration, there is a huge appetite to use technology to modernize government and to help make government itself more efficient. You can't achieve efficiency just based on cost cutting. You actually also will have to invest in technology. And I believe, and not just my belief from how spoken to them, they have an appetite to do that.

I believe that from having talked to very senior members of the administration, there is a huge appetite to use technology to modernize government and to help make government itself more efficient. You can't achieve efficiency just based on cost cutting. You actually also will have to invest in technology. And I believe, and not just my belief from how spoken to them, they have an appetite to do that.

I'll tell you where there's appetite. Air traffic control and Trump himself talking about maybe raythean IBM coming in to help solve some of the real anxieties we've got just a loss of radar over happening in Newark? Is that progressing? Ovin? Are you able to share on how any sort of contract might shape up?

I'll tell you where there's appetite. Air traffic control and Trump himself talking about maybe raythean IBM coming in to help solve some of the real anxieties we've got just a loss of radar over happening in Newark? Is that progressing? Ovin? Are you able to share on how any sort of contract might shape up?

Look, I don't want to talk about any specific contract or any specific agency, but I think what he just pointed out is a great example where technology will be part of the answer. Better integration, better computing capabilities, better communication capabilities, all of those will play a role because right now we are living on not exactly but essentially, I'll let's call it a slightly evolved system that was built in the nineteen seventies.

Look, I don't want to talk about any specific contract or any specific agency, but I think what he just pointed out is a great example where technology will be part of the answer. Better integration, better computing capabilities, better communication capabilities, all of those will play a role because right now we are living on not exactly but essentially, I'll let's call it a slightly evolved system that was built in the nineteen seventies.

Ovin, what's crucial about air traffic control is accuracy, and I know that's almost where everyone's eyes are when it comes to a GENTERKI when it comes to generative AI, is the risk of the underlying data being inaccurate and how that compounds? How are you managing to tackle that sort of area of anxiety and reality.

Ovin, what's crucial about air traffic control is accuracy, and I know that's almost where everyone's eyes are when it comes to a GENTERKI when it comes to generative AI, is the risk of the underlying data being inaccurate and how that compounds? How are you managing to tackle that sort of area of anxiety and reality.

I always break the problem down. The core of air traffic control has to be built on very precise data, completely accurate data. You're not going to go use agentic AI to estimate where a plane is. That's going to be based on much more physics and hard engineering. Now, could agentic AI come in trying to optimize routes in worrying about how do you increase the total flow and capacity at an airport? Perhaps? But I'm using the word perhaps because there's a lot of careful work to be done there. But could agentic AI be used to process claims faster at Social Security or the VA? Absolutely, and then you make citizens happier, you deliver them services faster at a lower cost. That's where I would go first with agent KI.

I always break the problem down. The core of air traffic control has to be built on very precise data, completely accurate data. You're not going to go use agentic AI to estimate where a plane is. That's going to be based on much more physics and hard engineering. Now, could agentic AI come in trying to optimize routes in worrying about how do you increase the total flow and capacity at an airport? Perhaps? But I'm using the word perhaps because there's a lot of careful work to be done there. But could agentic AI be used to process claims faster at Social Security or the VA? Absolutely, and then you make citizens happier, you deliver them services faster at a lower cost. That's where I would go first with agent KI.

In the private sector, they're looking for accuracy and that's something you're offering at the moment. How much is you just seeing the adoption and the use and productive use of agenda KI being limited by that underlying data right now, or is that something that we're streamlining already.

In the private sector, they're looking for accuracy and that's something you're offering at the moment. How much is you just seeing the adoption and the use and productive use of agenda KI being limited by that underlying data right now, or is that something that we're streamlining already.

I albit advise our clients start with the use cases where you can live with some risk, where you do not need it to be one hundred percent accurate. So if you think about customer service, you think about end client experience. I think about our internal IT help lists. Those are all areas where where you were dealing with people you actually had a ten or fifteen percent errorrate. So now that you deal with the AAI, you can actually have a lower error than that, but maybe not perfect, but you can still live with it.

I albit advise our clients start with the use cases where you can live with some risk, where you do not need it to be one hundred percent accurate. So if you think about customer service, you think about end client experience. I think about our internal IT help lists. Those are all areas where where you were dealing with people you actually had a ten or fifteen percent errorrate. So now that you deal with the AAI, you can actually have a lower error than that, but maybe not perfect, but you can still live with it.

Think is all about innovation. I'm looking at the car behind you. I'm thinking about the way in which you're also pushing the agenda, not only when it comes to hybrid, when it comes to on when you thinking about the innovations you're making on mainframes, but quantum A You're getting a lot of questions on quantum right now. Scott Beson wants the US to lead in AI but also in quantum computing. How is that making a difference in your business right now?

Think is all about innovation. I'm looking at the car behind you. I'm thinking about the way in which you're also pushing the agenda, not only when it comes to hybrid, when it comes to on when you thinking about the innovations you're making on mainframes, but quantum A You're getting a lot of questions on quantum right now. Scott Beson wants the US to lead in AI but also in quantum computing. How is that making a difference in your business right now?

So we are very very pleased with the innovation we brought out here. We talked about the AGENTAAI. We just mentioned the mainframe. We can do four hundred and fifty billion AI inferences per day on the latest mainframe we just announced this quarter, the Z seventeen. Think about using that in financial systems to help reduce fraud. So that's an incredible area of innovation on quantum. Part of the reason we announced the huge investment last year and into quantum, and we just brought out the quantum system to this year is because we are very excited where that will go. That's an area in which we believe the US must and can lead on quantum computing, both for national security, but also for competitive advantage and for growing a business.

So we are very very pleased with the innovation we brought out here. We talked about the AGENTAAI. We just mentioned the mainframe. We can do four hundred and fifty billion AI inferences per day on the latest mainframe we just announced this quarter, the Z seventeen. Think about using that in financial systems to help reduce fraud. So that's an incredible area of innovation on quantum. Part of the reason we announced the huge investment last year and into quantum, and we just brought out the quantum system to this year is because we are very excited where that will go. That's an area in which we believe the US must and can lead on quantum computing, both for national security, but also for competitive advantage and for growing a business.

And is that a competitive advantage continue to grow here in the United States. You've just unveiled a huge amount of investment into the US.

And is that a competitive advantage continue to grow here in the United States. You've just unveiled a huge amount of investment into the US.

Yes, So we put one hundred and fifty billion dollars here into the US because we believe that if I look at AI, I look at hybrid cloud, and I look at quantum coming, the growth opportunities are here. So we want to invest to take advantage of these opportunities.

Yes, So we put one hundred and fifty billion dollars here into the US because we believe that if I look at AI, I look at hybrid cloud, and I look at quantum coming, the growth opportunities are here. So we want to invest to take advantage of these opportunities.

IBM Chairman President CEO Arvin Christian and live from think We very much appreciate your time today

IBM Chairman President CEO Arvin Christian and live from think We very much appreciate your time today