IBM CEO Predicts AI Adoption Surge as DeepSeek Challenges Cost Paradigm

IBM CEO Says DeepSeek Moment Will Help Fuel AI Adoption

(Bloomberg) -- International Business Machines Corp. Chief Executive Officer Arvind Krishna said a reckoning over the costs of developing artificial intelligence models following the rise of Chinese startup DeepSeek will help fuel adoption of the technology. "We will find that the usage will explode as costs come down," Krishna said during an interview with Bloomberg Television at the World Government Summit in Dubai. "I think it is a validation -- we have been on the point that you do not have to spend so much money to get these models." Last month, the Chinese company DeepSeek released an AI model that it said cost significantly less to train than those from US counterparts. The launch led investors to question the level of capital expenditure that big tech firms have been making in the technology. Analysts anticipate that lower AI model costs could help software companies such as IBM offer these features more widely. For more: IBM Gives Long-Term Sales Growth Outlook That Tops Expectations The firm has worked to transform itself from a conventional computer company into one focused on high-growth software and services. It has booked about $5 billion in generative AI-related business since mid-2023, mostly in consulting.

IBM CEO Says DeepSeek Moment Will Help Fuel AI Adoption

International Business Machines Corp. Chief Executive Officer Arvind Krishna said a reckoning over the costs of developing artificial intelligence models following the rise of Chinese startup DeepSeek will help fuel adoption of the technology. "We will find that the usage will explode as costs come down," Krishna said during an interview with Bloomberg Television at the World Government Summit in Dubai. "I think it is a validation -- we have been on the point that you do not have to spend so much money to get these models."

IBM CEO Arvind Krishna: AI Adoption Will 'Explode' As Costs Drop | PYMNTS.com

IBM CEO Arvind Krishna reportedly said Tuesday (Feb. 11) that the lower costs said to have been achieved by DeepSeek will help boost demand for artificial intelligence (AI). "We will find that the usage will explode as costs come down," Krishna told Bloomberg Television. IBM has shifted its focus to high-growth software and services and has booked about $5 billion in generative AI-related business since mid-2023, mostly consulting, Bloomberg reported Tuesday. Lower AI model costs are expected to help companies like IBM offer AI features to more customers, according to the report. DeepSeek's launch of a new AI model in late January drove a plunge in tech stock prices, because the company claimed to use substantially fewer Nvidia chips to achieve comparable performance to those of its U.S. rivals. "DeepSeek challenges the narrative that innovation must come at an unsustainable cost," Gokul Naidu, a consultant for SAP, told PYMNTS in an interview posted Jan. 27. "For businesses, this means AI could soon be accessible to small and medium enterprises, not just tech giants with deep pockets." BofA Global Research said Jan. 28 that the $5.58 million cost of training a foundation model that was claimed by DeepSeek is "misleading" because the company did not include costs related to research, experiments, architectures, algorithms and data, but added that the bigger picture is that the startup introduced innovations that show less costly training is possible. "Cost is the biggest hurdle to adoption of AI applications," BofA Global Research analysts Brad Sills and Carly Liu wrote in a note published Jan. 28. "We believe advancements in cost could drive price even lower and therefore adoption higher." Anthropic CEO Dario Amodei wrote in an essay posted Jan. 29 that claims about DeepSeek's potential threat to U.S. AI leadership is "greatly overstated" and that the drop in chip maker Nvidia's stock driven by the release of DeepSeek's AI models was "baffling." Amodei wrote that a closer look shows that the DeepSeek model is close to the performance of U.S. models that are between seven and 10 months older; is "an expected point on an ongoing cost reduction curve;" and was trained by a company whose total spend as a company is not so different from U.S. AI labs.

DeepSeek to Help Fuel AI Adoption, Says IBM CEO

IBM CEO and Chairman Arvind Krishna discusses the impact of DeepSeek throughout the tech industry, the risk of AI regulation stifling innovation, and his company's focus on quantum computing. He speaks with Bloomberg's Joumanna Bercetche on the sidelines of the Paris AI Action Summit. (Source: Bloomberg)