Arvind Krishna says "orchestration and data layers" will capture future value as AI spending reshapes tech industry

IBM’s stock plunged 25% on July 14 after the company issued preliminary second-quarter figures. Chief Executive Arvind Krishna attributed the decline to clients reallocating budgets toward servers, storage, and memory due to rising hardware costs, which postponed several large software agreements in IBM’s mainframe and transaction-processing divisions. During the earnings call, Krishna noted that in an environment where businesses increasingly demand artificial-intelligence infrastructure, the industry’s future profitability will center on the layers that organize data and manage operations. The remark underscores IBM’s strategy of building governance and control tools for enterprise AI, even as its software, consulting, and infrastructure segments each follow independent cycles.