IBM clients continue to prioritize digital transformation through the cloud and investment in AI as tech spend remains strong across the banking industry.  

“This focus on digital transformation and AI initiatives to drive productivity and cost savings has been consistent throughout the year,” Chief Financial Officer Jim Kavanaugh said during IBM’s Q4 2023 earnings call today.

During the quarter, IBM saw ongoing demand for data and technology projects focused on AI and analytics, along with an uptick in the need for consulting expertise from IBM in AI, generative AI and cloud modernization projects, Chief Executive Arvind Krishna said on the call.  

Technology consulting revenue, which includes expertise on implementing cloud platforms and how to enable innovation, increased 4% year over year to $1 billion, according to the tech giant’s earnings charts. 

BY THE NUMBERS: IBM reported in Q4: 

• Total revenue increased 4% YoY to $17.4 billion; 
• Software revenue grew 2% YoY to $7.5 billion; and 
• Infrastructure revenue increased 2% YoY to $4.6 billion. 

NOTEWORTHY: In 2023, IBM rolled out watsonx, its AI and data platform that allows IBM clients to “train, tune, validate and deploy AI models,” Krishna said.  

In Q4, IBM added to watsonx’s capabilities with the launch of watsonx governance, he said. “This toolkit helps organizations manage and monitor their AI and prepare for compliance with future AI-related regulations.” 

Financial institutions, including London-based NatWest, have embedded watsonx in their chatbot experiences, Krishna said during IBM’s Q2 earnings call in July. 

TRANSACTION: In December, IBM and Meta teamed up to form AI Alliance, Krishna said.  

The group brings together 70 industry and academic leaders to discuss open, safe and responsible AI use, he said. 

FORWARD LOOK: IBM expects clients to continue to invest in technology, including cloud and AI, throughout this year, Krishna said. 

“We feel pretty good that technology budgets should stay in line with 2023 going into 2024,” he added. 

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