| | NOVEMBER 202319game show Jeopardy with Watson, an early-stage AI technology. Deep Blue and Watson captured the public imagination and became household phrases far beyond the realms of technology.According to reports, IBM is placed in the leader's part of its Magic Quadrant report on Cloud AI Developer Services in 2022, with Microsoft, Google, and Amazon Web Services (AWS). But that was until OpenAI's sentient-sounding chatbot, ChatGPT, transformed the world forever in November 2022, launching the current flood of spectacular, game-changing AI developments that keep tech pros and business leaders awake at night. But that was until OpenAI's sentient-sounding chatbot, ChatGPT, transformed the world forever in November 2022, launching the current flood of spectacular, game-changing AI developments that keep tech pros and business leaders awake at night.According to IBM's management, the company's usage of advanced AI approaches such as foundation models, large language models, and generative AI enables it to construct 100 AI models from a single dataset. While management claims that this approach has resulted in a 70 percent faster time to value in early cloud engagements, it's important to note that these successful situations may not be typical client experiences.While IBM's management appears to be bullish about the company's AI agenda, the company feels it is critical to proceed with prudence. IBM's past record in AI, particularly in healthcare, along with a competitive landscape and unpredictable technology improvements casts doubt on its capacity to properly capitalize on.OpenAI and Google aren't the only organizations conducting major AI research. IBM has one of the world's largest and most well-funded AI research programs. Decades of artificial intelligence research have kept the corporation at the forefront of modern AI research.How AI affected IBM's financial performanceIBM increased revenue to $60.5 billion in 2022, a six percent increase over 2021. IBM's year-over-year growth continued in the first quarter of this year, reaching $14.3 billion compared to $14.2 billion the previous year. Big Blue's software division, which includes AI and cloud computing revenue, increased sales by 2.6 percent year over year in Q1, accounting for $5.9 billion of the quarter's $14.3 billion. Its infrastructure sector, which includes z16 server sales, gained $3.1 billion in the first quarter as zSystems revenue increased 11 percent year on year. Furthermore, IBM's Q1 gross profit margin grew to 52.7 percent from 51.7 percent last year. The company's profit margins were boosted by its own use of AI in its operations. For example, the company's human resources department used an IBM-developed virtual assistant powered by AI to cut HR-related activities by 75 percent.IBM's AI InvestmentGartner considers IBM to be one of the leaders in AI technology. This acknowledgment will assist Big Blue in maintaining its market position in the AI sector, which is predicted to expand from $142.3 billion in 2022 to $1.8 trillion by 2030. IBM's strong financials complement its AI capabilities. At the end of the first quarter, the corporation had total assets of $133.6 billion and total liabilities of $112 billion. Its first-quarter free cash flow (FCF) was $1.3 billion, up from $1.2 billion in 2022. FCF is expected to reach $10.5 billion in 2023, up more than $1 billion from last year. THE SOLID FOURTH-QUARTER PERFORMANCE CAPPED A YEAR IN WHICH WE GREW REVENUE ABOVE OUR MID-SINGLE DIGIT MODEL. CLIENTS IN ALL GEOGRAPHIES INCREASINGLY EMBRACED OUR HYBRID CLOUD AND AI SOLUTIONS AS TECHNOLOGY REMAINS A DIFFERENTIATING FORCE IN TODAY'S BUSINESS ENVIRONMENT," SAYS ARVIND KRISHNA, IBM CHAIRMAN AND CEO
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