IBM CEO Arvind Krishna speaks at the SXSW conference in Austin, Texas on March 11, 2025.
Andy Wenstrand | Sxsw Conference & Festival | Getty Images
international business machine CEO Arvind Krishna told CNBC on Wednesday that the company is operating cautiously due to the Iran war and other geopolitical uncertainties.
IBM beat analysts’ first-quarter profit estimates on revenue and bottom line, but maintained its outlook due to macro uncertainty.
“If inflation goes up, will we have a problem with oil? Will it cause people to spend a little bit less? Even if they spend a little less, that doesn’t directly affect me, but a lot of consumer companies are my customers. walmart. “If people buy less at Walmart, they’ll find ways to control costs and buy less,” he said.
Mr. Krishna pointed out that IBM’s Middle East business was performing well despite the Iran conflict.
The company reported first-quarter revenue of $15.92 billion, beating the LSEG consensus estimate of $15.62 billion. Adjusted earnings per share came to $1.91, beating estimates by 10 cents. Software won, and Red Hat’s growth returned to 10%.
Mr. Krishna also said he was cautious about European growth concerns.
“I think that’s the only place where they’re narrowing their eyes, because there are some parts that are a little fed up with it. There was the COVID-19 shock, there was the Ukraine war. So they’ve been through these shocks several times and they’re actually OK. I think this time it’s an open question,” Krishna said.
“I don’t think anyone will know the answer until another month or two,” he added.
mythology
Anthropic’s launch two weeks ago of its powerful new Mythos artificial intelligence model, which can discover security vulnerabilities at an unprecedented rate and volume, sent shockwaves across technology, and other companies will soon follow suit, Krishna said.
“Someone does something. It looks magical. It looks great. We think it’s the only thing. Three months later, someone copies it and actually makes it better,” he said.
“I’d be surprised if someone else doesn’t bother to claim it if they haven’t done it yet,” he added.
IBM stock plunged in April after the AI startup announced its Claude Code tool could modernize legacy systems running a common business-oriented language. COBOL is a code system developed in the late 1950s that is regularly used in business data processing.
Mythos’ release sparked an impromptu meeting between Treasury Secretary Scott Bessent, Federal Reserve Chairman Jerome Powell and the heads of America’s top banks over AI cyber concerns. Bessent and Vice President J.D. Vance spoke on the same topic with technology CEOs including Anthropic’s Dario Amodei, OpenAI’s Sam Altman, and xAI’s Elon Musk.
“This is a huge discussion, and there’s no question that vulnerabilities can be discovered and exploited at a speed and pace we’ve never seen before,” Krishna said.
