IBM Blames Misreading AI Capital Spending Trend for Quarterly Slip

In a letter to shareholders, IBM’s chief executive Arvind Krishna acknowledged that the company failed to anticipate a rapid change in how customers allocate capital toward AI infrastructure. While IBM expected some supply‑chain disruptions, it did not foresee customers prioritising capital expenses for servers, storage and memory to safeguard AI workloads. This gap forced IBM to miss several large contracts on schedule, eroding quarterly performance. Despite a modest overall revenue rise, the firm reported a 7 % decline in infrastructure income and a 2 % dip in diluted EPS. Krishna reaffirmed IBM’s continued investment in artificial intelligence and quantum computing, stressing confidence in the firm’s portfolio and strategic direction.