Artificial Intelligence · Profile from AI Research Companion
IBM
The 115-year-old Armonk computing company whose Jeopardy!-winning Watson system made it the most famous name in commercial AI in the 2010s. It then became the industry's best-known cautionary tale when Watson Health was sold off in 2022. Since 2020 IBM has rebuilt its AI strategy around three ideas: hybrid cloud as the platform, centred on the ~$34bn Red Hat acquisition (2019); small, open, governed models (the Granite family) delivered through the watsonx platform (2023); and consulting as the main route for selling AI to large enterprises. It also bought the plumbing that enterprise AI runs on: HashiCorp (~$6.4bn, closed February 2025), DataStax (May 2025) and Confluent (~$11bn, closed March 2026). IBM does not compete at the frontier. It partners with model labs, including Anthropic (October 2025), and hosts their models alongside its own. IBM's inception-to-date "generative AI book of business" passed $12.5bn (January 2026, company), mostly from consulting. In Q3 2026 its software revenue grew 8% and Red Hat 11% (company, October 2026).
At a glance
- Founded
- 1911 as the Computing-Tabulating-Recording Company; renamed International Business Machines in 1924
- Headquarters
- Armonk, New York; IBM Research at Yorktown Heights, New York, and labs worldwide; Red Hat in Raleigh, North Carolina
- Ownership / structure
- Public (NYSE: IBM). Red Hat, HashiCorp and Confluent operate as units inside IBM Software
- Leadership (2026)
- Arvind Krishna (chairman and CEO; CEO since 6 April 2020); Jim Kavanaugh (CFO; verify current title); Rob Thomas (head of software and chief commercial officer, verify title); Dario Gil led IBM Research until 2025 and then left for a US government post (reported, verify); Red Hat CEO Matt Hicks
- AI products
- watsonx platform (watsonx.ai, watsonx.data, watsonx.governance, from 2023); watsonx Orchestrate (agents); Granite models (2023; open-weight under Apache 2.0 from May 2024; Granite 4.0 hybrid Mamba-transformer, October 2025); Red Hat AI (RHEL AI, OpenShift AI, the vLLM-based inference server); IBM Bob AI development environment (built with Anthropic's Claude; preview October 2025, general availability reported May 2026); consulting (IBM Consulting Advantage); AI accelerators on IBM Z and Power servers
- Scale
- Revenue ~$62.8bn (2024) and $67.5bn (2025), with free cash flow of $14.7bn in 2025 (company, January 2026). Q3 2026 revenue $17.1bn, up 5% (company, 21 October 2026). Generative AI book of business >$12.5bn inception-to-date (company, January 2026); the Q3 2026 release gives no updated total, only generative AI at ~30% of consulting revenue and ~35% of consulting backlog (company, 21 October 2026; re-checked Nov 2026). Headcount ~270,000–290,000 (verify)
- Capital (AI-relevant deals)
- Watson Group $1bn commitment (January 2014); Watson Health acquisitions >$4bn (2015–16); Red Hat ~$34bn (closed July 2019); Watson Health assets sold to Francisco Partners for a reported ~$1bn (2022); HashiCorp $6.4bn (closed 27 February 2025); DataStax (closed 28 May 2025, price not disclosed); Confluent ~$11bn (closed 17 March 2026); $11.4bn of acquisitions year to date by Q3 2026 (company)
- Key partnerships
- Anthropic (Claude in IBM software, October 2025); Meta (co-founded the AI Alliance, December 2023); Hugging Face (investor, August 2023); AWS, Microsoft, Google, Salesforce, SAP and Oracle (watsonx and consulting alliances); Groq (inference, 2025, verify); Together AI ($240m inference cluster on IBM Cloud, August 2026); Nvidia and AMD (GPUs on IBM Cloud)
- Signature moves (incl. failures)
- Watson and Jeopardy! (2011) and the Watson Group (2014); Watson Health's rise and sale (2015–2022); Red Hat and the hybrid-cloud platform (2019); Krishna's reset (exiting face recognition, the Kyndryl spin-off) (2020–21); watsonx and the AI hiring pause (2023); Granite open models (2023–25); HashiCorp (2024–25); the Anthropic partnership and multi-model strategy (2025–26); Confluent and real-time data for AI (2025–26)
9 strategic moves analysed
Each one gets a full strategy file in the companion: context, the decision, the financing, what happened, and the lesson.
2011
Watson Jeopardy and the Watson Group
Launch / reorganisation
2015
Watson Health Rise and 2022 Sale
Acquisitions / divestiture (failure)
2019
Red Hat Acquisition and Hybrid Cloud
Acquisition
2020
Krishna Reset Face Recognition Exit and Kyndryl
Restructuring / product exit
2023
Granite Models and Open Weights
Model release
2023
watsonx Launch and the AI Hiring Pause
Launch
2024
HashiCorp Acquisition
Acquisition
2025
Anthropic Partnership and the Multi Model Strategy
Partnership
2025
Confluent Acquisition and Real Time Data
Acquisition