The Six Five team discusses IBM AI Cloud Supercomputer announcement.
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Transcript:.
Patrick Moorhead: Microsoft had its event, I totally understood the context of Google’s event, and then this week, IBM unveils that they have had an AI supercomputer called Vela or Vela that has been out there using x86 processors, Nvidia GPU, ethernet, so aka industry standard, to train what it calls foundational AI models. And then you’re like, “I don’t think I’ve ever heard the term foundational AI models,” maybe the AI experts out there. But what happened is essentially foundational models, one example is GPT-3 is called by some foundational AI models. I wish that IBM would’ve just used terms that I think people were familiar with ’cause I don’t think they fully got their pound of flesh out of there. But the cool part is this supercomputer has been online since May of 2022.
So in other words, this may have been a PR reaction, or not a reaction, maybe an intelligent way to take advantage of the flow. But this has been online for a long time. I, for one, am super interested to see what IBM can do with this ’cause quite frankly, it’s one thing to learn how to do a kid’s recipe, or where I should go on a trip, like we saw with both Bard and the new Bing, it’s a whole other thing to figure out how you get business value out of this new phase of AI. So looking forward to it.
Daniel Newman: Yeah, IBM has been on a really good trajectory. The company has stabilized during what was a tough macro year. That’s because their business really is focused now serving the enterprise. Really two things are in focus every day for IBM and Arvind Krishna, and that’s hybrid cloud and AI. That’s the focus, that’s what the company’s been leaning into, and that’s what I expect the company to continue to lean into in the future. To me, this was a little bit of newsjacking in the sense of, “Hey, let’s go ahead and put some PR out there this week amidst a lot of interest in what big tech companies are doing around AI.” But there’s also some real meat here. And the first is the transparency to explain because transparency right now is one of the things that people are really looking for, whether that’s Microsoft talking about responsible AI, or IBM just explaining its infrastructure decisions of how it’s building this super computer and why this is going to eventually matter.
Having this infrastructure built out correctly is going to be really important long term for not just R&D but for the ability to deliver value. IBM makes its money by delivering customer value. It does it for the enterprise, and enterprises are saying, “Hey, how do we get more from our data?” So in order to get more from your data, you are going to need models like what IBM is building, on hardware like IBM is building, to be able to deliver it at scale.
So the company is kind of saying, “Hey, we want to make sure the world knows that we’re doing interesting things too.” And yes, on the consumer and everyday use case, something like OpenAI and something like Bard are going to change the way we search and change the way we browse the internet, but for IBM, they’re saying, “Hey, when you’re using your business intelligence tools, when you’re running your supply chain management offerings, when you’re trying to optimize ERP, we’re building tools that you could use advanced AI capabilities on our AIU, our hardware and infrastructure, and we’re going to be able to help you optimize it.
So IBM really is more of a partner to all this in my opinion. They’re going to align on the back, Pat. What do you say about connecting the back to the front, and then adding really important AI tools? That’s the story they’re trying to tell. I believe that the company is doing some really progressive things, that’s why their revenues have been screaming in the right direction. They’re software focused, they’re AI focused, they’re hybrid infrastructure focused, and that’s how the enterprise is architecting itself to be able to take advantage of large language models, take advantage of the next generation of AI. So IBM is doing some things, it kind of aligns in the moment. I don’t think it was totally directly competitive, but I do see overlapping features and this type of AI, the application of it in the enterprise, will be material.
Patrick Moorhead: Yeah, and in fact, I saw it closer to Azure’s announcement of ChatGPT and OpenAI capabilities on Azure cloud than anything else.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
