IBM’s AI investments paid off in 2025, clocking gains in internal production and client efficiency and setting the stage for new AI initiatives in 2026.  

More than 20,000 IBM employees using IBM’s AI-based software development system “Project Bob” reported productivity gains averaging 45% in 2025, President and Chief Executive Arvind Krishna said during its Jan. 28 fourth-quarter earnings call. 

“Bob introduces intelligent orchestration between industry-leading frontier models such as Anthropic’s Claude and Mistral, small language models, including IBM Granite and custom models all optimized for cost and performance,” he said. 

As internal use of AI grew, Big Blue’s gen AI book of business more than doubled year over year in Q4 to roughly $12.5 billion, comprising $10 billion in consulting services and $2.5 billion in software sales, Krishna said.  

Morgan Stanley is among the financial institutions infusing IBM’s gen AI products into core workflows. Mastercard, too, is benefiting from its gen AI solutions, Krishna said. 

As AI continues to evolve, IBM aims to “make it easy for clients to build AI that is specific to their data, their processes and their competitive needs, including the effective use of smaller, more efficient models where they make sense,” he said.  

BY THE NUMBERS: In its Q4 earnings statement, Armonk, N.Y.-based IBM reported:  

• Total revenue increased 12.2% YoY to $19.7 billion; 
• Software revenue rose 14% YoY to $9 billion; 
• Consulting revenue rose 3.4% YoY to $5.3 billion; 
• Infrastructure revenue jumped 20.6% YoY to $5.1 billion; and 
• Net income surged 92.1% YoY to $5.6 billion. 

Infrastructure revenue growth was largely driven by z17 — a mainframe launched in April 2025 designed for secure integration, processing and scaling of AI at financial institutions. The technology is delivering 50% more AI inferencing operations per day than the z16 mainframe launched in 2022, Krishna said. 

FLASHBACK: In December, IBM agreed to acquire cloud-native data streaming platform Confluent for $11 billion. This acquisition is another pillar to IBM’s AI strategy, “helping unify our hybrid-cloud and automation solutions through a small data platform,” Krishna said. 

“Confluent has the most capable technology to unlock the real-time value of data across applications, clouds, APIs, and as AI agents enter the enterprise, they will need access to that data in real time,” he said.  

IBM also partnered with fintech Finastra in 2025 to enhance cloud-based lending solutions.  

BY THE NUMBERS: Shares of IBM [NYSE: IBM] were up 5.1% from market open to $309.24 as of market close today. It has a market capitalization of $289.1 billion.  

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