IBM CEO Ginni Rometty is trying hard to keep the company’s momentum going after posting modest quarterly sales growth following a five-year streak of declines.
Speaking at IBM’s annual conference on Tuesday in Las Vegas, Rometty reiterated the company’s mantra that the next big wave in technology will be artificial intelligence and the big business opportunities it creates.
The thinking (or, more precisely, marketing spiel) goes that most companies have huge amounts of data that they haven’t crunched. By using AI systems like deep neural nets, they would be able to learn things about their businesses they wouldn’t have thought of on their own—and ultimately improve sales.
But of course, AI is not that simple. Managing complex AI technologies requires experts with PhDs and constant monitoring to keep the wrong kind of data from getting in, resulting in useless results. AI is incredibly powerful, letting computers quickly recognize cats in photos. But it’s also incredibly obtuse, to the point that it can confuse guns with turtles.
Nevertheless, the potential money IBM and other companies like Google, Microsoft, and Amazon can make by selling AI is likely to be in the billions of dollars, especially if they can convince customers to store their corporate data with them. The more data that customers store in data centers operated by the cloud giants, the more money these cloud companies can make, especially if they charge extra for crunching that data for clients.
IBM (IBM), like Google, Amazon, and Microsoft (MSFT), realize that there won’t be a sudden explosion in the number of AI experts (and if there are, they will likely hire them), so they are creating easier-to-use tools for conventional developers to perform AI-related tasks, such as a Watson service IBM unveiled today in partnership with Apple.
“We reinvented IBM for this era of data,” Rometty said about her company’s push into data crunching to offset declines in its core software business.
What was also noteworthy in Rometty’s speech was an emphasis on how AI can potentially affect society, not just businesses. Many are worried that the technology will lead to widespread job displacement.
Additionally, recent problems plaguing Facebook involving political data firm Cambridge Analytica potentially misusing the data of 50 million of the social network’s users underscore people’s fears that companies shouldn’t be trusted with sensitive data.
Rommeti did not mention Facebook (FB) by name when discussing being a good “data steward.” But it’s clear she had the social network and possibly Google’s (GOOG) ad business, which is based on detailed information about user habits, in mind when she said “we believe the data belongs to you.”
“Our business model is not about monetizing that,” Rommeti said.
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To hammer home of the point, Verizon CEO Lowell McAdam joined Rometty on stage and also talked about running a business that treats customer data with respect. Verizon, it should be noted, suffered a data breach last July, and apologized while downplaying the impact.
“We have seen the things going on in Silicon Valley,” McAdam said. “We don’t ever want to be in that position.”
As technology analyst Patrick Moorhead noted on Twitter, Verizon owns AOL and the remnants of Yahoo, which “make money from consumer data advertising.”
Now Verizon CEO Lowell McAdam is FUDing consumer data use. Doesn't Verizon own AOL and Yahoo who also make money from consumer data based on advertising? I'm confused. #think2018 pic.twitter.com/iF81IMdlIR
— Patrick Moorhead (@PatrickMoorhead) March 20, 2018
IBM shares fell 1,13% in midday trading on Tuesday to $155.57
