Why IBM Could Be a Big Winner in AI

ChatGPT, an AI chatbot based on OpenAI, has gone viral. Based on the company’s GPT-3.5 language model, ChatGPT is capable of some serious feats. Not always right, but this technology has incredible potential.

I asked ChatGPT about the following question International Business Machines (IBM -0.04%)“In two sentences, why IBM could be the winner in the AI ​​market.” Here is his answer:

IBM has a long history in the field of AI and has developed a robust portfolio of AI products and services. The company also has a large and diverse customer base, which provides it with a competitive advantage in the AI ​​market.

IBM, in fact, was a pioneer in the field of natural language understanding software. Back in 2011, IBM’s Watson computer won It is in danger! against the former champions. This happened more than a decade after IBM’s 1997 victory over the world chess champion using its deep blue computer.

The advances in AI that underpin ChatGPT are going to unlock new models and create new billion dollar companies. Tech giants Microsoftalready an investor in OpenAI extended its partnership with a multiyear, multibillion-dollar investment earlier this month. Microsoft sees AI as the next big computing platform, and is investing heavily in making sure it emerges as a leader.

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Through AI to boost productivity

IBM predicts that AI has the potential to add about $16 trillion to the global economy by 2030. The company’s focus is helping its large enterprise base of clients use AI to improve efficiency, boost efficiency and lower costs.

When global economies appear to be in recession, that pitch resonates with IBM’s customer base. While IBM is doing a variety of things with AI technology, the automation initiative is the star of the show.

IBM’s automation solutions, part of the software segment, increased revenue by 9% year-over-year in constant currency in the fourth quarter. Revenue from data and AI solutions, which focus more on analytics, customer care, and supply chain management, increased sales by 8%.

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IBM CEO Arvind Krishna gave a few examples of how IBM clients are now using its AI capabilities to appeal to their quarterly earnings. For example, a quick service restaurant using IBM’s AI to automate part of the drive-thru and order taking; the customer has used AI to increase the rate at which calls are handled in its call centers without human intervention; and another customer using AI-powered chatbots to help the customer with their payments.

The large, diverse customer base that we’ve described for ChatGPT will come in handy as IBM expands its AI business. The company has long-standing relationships with the largest companies and many governments. One example: 90% of the world’s 50 largest banks use IBM mainframe systems. When an IBM client is looking to find ways to improve productivity with AI, IBM is going to be the obvious choice.

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Sleeping on the AI ​​market

IBM will work on AI to improve customer productivity not the same focus that ChatGPT is getting. However, the company is well positioned to be one of the driving forces behind large-scale efforts to use AI technologies to automate tasks, improve productivity and reduce costs.

The ability to save your customers money is important, especially in difficult economic times. Big companies are putting a renewed focus on keeping costs down, and are starting to plan layoffs. New technology projects are not going to appeal to everyone unless they promise lower costs. IBM will still feel some pain from the recession, as will almost every other company, but its focus on helping its customers bring down costs should do well with its base.

Timothy Green has positions in International Machinery. Motley Fool has positions and recommends Microsoft. Motley Fool has a plan to open.


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