IBM Chairman and CEO Arvind Krishna has said the company must move faster in adapting to changing market dynamics as enterprise customers increasingly prioritise investments in artificial intelligence (AI) infrastructure over broader technology spending.
The comments come after IBM lowered its full-year revenue growth forecast, citing a slower-than-expected pace of deal closures despite continued demand for AI and hybrid cloud solutions. The company said macroeconomic uncertainty and shifting customer priorities influenced its revised outlook.
IBM Acknowledges Need for Greater Agility
In a letter to investors following IBM’s second-quarter results, Krishna acknowledged that the company needed to respond more quickly to changing market conditions.
“These conditions require our teams to execute perfectly, and this quarter we faltered. We did not adapt and move quickly enough, and numerous large deals failed to close on the timelines we expected,” he wrote.
Krishna added that IBM has taken steps to strengthen execution and improve the company’s ability to respond to evolving customer needs as businesses continue to modernise their technology infrastructure.
AI Spending Reshapes Enterprise Technology Priorities
IBM said many enterprise customers are directing a greater share of technology budgets towards building AI capabilities, resulting in more selective spending on other digital transformation initiatives.
Despite lowering its annual revenue growth forecast, the company said demand for its AI portfolio, including the watsonx platform and AI consulting services, continues to grow. IBM also highlighted its expanding pipeline of generative AI engagements across industries as organisations seek to improve productivity and automate business processes.
Cultural Change Remains Central to IBM’s Strategy
Krishna’s remarks underscore IBM’s broader effort to strengthen organisational agility as the technology sector undergoes rapid transformation driven by AI adoption and changing enterprise spending patterns.
According to reporting by The Wall Street Journal, Krishna acknowledged that IBM’s culture had been slow to evolve alongside the industry’s transition to cloud computing and consumption-based business models, emphasising the need for faster organisational change to remain competitive. While the Journal reported his comments, IBM’s official investor communication focused on improving execution and adapting more quickly to customer demands.
Sources: IBM Investor Letter (Q2 2026), IBM Q2 2026 Earnings Results, Reuters, The Wall Street Journal, CNBC.
