IBM’s generative AI business climbed more than $1 billion in the third quarter, reaching $3 billion as clients invest in the tech.  

“Clients are reprioritizing their IT budgets to prepare for generative AI,” IBM Chief Financial Officer James Kavanaugh said during the company’s Q3 earnings call on Oct. 23.

NatWest, for one, announced an upgrade to its digital assistant Cora during Q3, according to an Aug. 1 NatWest release. It’s new Cora+ uses IBM’s generative AI to provide more conversational customer experiences. 

“By collaborating with IBM, we have been able to build on Cora’s success and leverage the latest innovations in AI,” Wendy Redshaw, chief digital information officer for retail at NatWest, said in the release. 

Kavanaugh added that alongside gen AI-driven virtual assistants, the gen AI growth was boosted by early interest in IBM’s newest gen AI-driven solutions: 

• Watsonx Code Assistant, which uses generative AI to create enterprise-ready code; 

• Red Hat Enterprise Linux AI, a foundation model platform used to develop, test and run generative AI models; and 

• Red Hat Ansible Lightspeed, IBM’s automation platform allowing for automation adoption at school. The platform was equipped with IBM’s gen AI-driven watsonX Code Assistant in Q3. 

IBM expects further gen AI business growth after the completion of its $6.4 billion cash acquisition of cloud services provider HashiCorp, Kavanaugh said.  

“This early momentum is important” as IBM builds “a solid generative AI book of business,” he said. 

Shares of IBM were down 6.8% to $216.85 per share at 1:18 pm ET today. IBM has a market capitalization of $199.9 billion. 

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