“Five years from now, if you’re not using [artificial intelligence] in every part of your business, I can look you in the eye and say you’re going to be fundamentally disadvantaged,” IBM (IBM) CEO Arvind Krishna told Yahoo Finance at the 2024 Invest conference. D.A. Davidson Managing Director Gil Luria joins Morning Brief Hosts Seana Smith and Brad Smith to discuss where IBM stands in the AI era and how businesses are leveraging the emerging tech. IBM has “one of the most valuable businesses in AI right now, which is a consulting business that helps companies figure out what they’re going to do with AI,” Luria says, adding, “Unfortunately for them, it’s a relatively small part of the business. The overall business depends on a lot of other services and hardware and business process outsourcing. So, it may not drive very rapid growth for the overall company, but that consulting business is doing phenomenally well right now because so many companies want to know what to do with AI.” The analyst explains that “almost all of AI spend right now is experimental. There are very few real-life products that are adding value and scaling, and that’s not too surprising … This technology is extraordinarily young. The big breakthroughs only happened a couple of years ago. Many of the breakthroughs just happened months ago. And so it takes a lot of time to refine this type of technology and to move it from being a breakthrough in science to being a productive enterprise software product that we can all use and create efficiencies and drive new revenue.” Luria notes that AI for enterprise use requires different standards than consumer AI. “This AI technology still has to be refined. Let’s not forget that just because we’re okay with ChatGPT giving us a wrong answer one out of every five times, that’s not the case for enterprise software. The technology has to be at a point where hallucinations are near zero for us to actually implement them in a real environment and use them for mission-critical systems.
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