IBM vs. Microsoft vs. NVIDIA and AI

By Rob Enderle for Techspective

Twenty years ago, NVIDIA and Microsoft were nowhere with AI, while IBM’s Watson was winning Jeopardy! and later taking on professional debaters. Conventional knowledge was that IBM was going to own AI, but no one seemed to care since projections at the time indicated that AI wouldn’t take off until sometime around 2040, when general-purpose AI was expected to become viable. Microsoft had a leading AI concept in Cortana but didn’t invest in it any more than Apple invested in Siri. Eventually, it was quietly phased out.

Then in March of last year, Microsoft announced Copilot and suddenly became the AI darling. Copilot was a workable AI that started generating revenue almost immediately. This year, NVIDIA, which had been developing AI quietly for over two decades, went vertical as the new King of AI, making Microsoft and NVIDIA two of the top three most valuable tech companies in the world.

What happened? IBM was way out front but is now almost a footnote. Maybe it’s a mismatch between strategy and leadership.

IBM’s Opportunity and Problem

IBM once had the longest-serving CEO in technology. Thomas Watson was CEO for a whopping 41 years. That consistency in leadership allowed the company to execute across decades. More recently, IBM leadership has turned over around every decade. Any effort with a payback out more than a decade (AI was in process since the early 2000s) just wasn’t going to be a top-level priority for the company. Why invest the firm’s capital in an effort that you’ll never get credit for? It shouldn’t be that way, but it is. How much would you invest in a project that you’ll never get credit for?

So, IBM under-invested in its technology, and now, instead of being ahead of the curve, it’s starting to look like it is behind (it isn’t, but perceptions are reality). It’s not because the IBM folks didn’t work hard or that watsonx is a bad product. It’s because IBM needed to invest at NVIDIA’s level from the start, but its organizational structure just didn’t allow for that. It should have either changed its policy with regard to CEO longevity or changed tactics to something more like what Microsoft has…

To learn more about how Microsoft moved on the opportunity to use AI and more, read the full article: IBM vs. Microsoft vs. NVIDIA and AI

About the Author

Rob Enderle is the president and principal analyst at the Enderle Group, where he provides regional and global companies with guidance on how to create a credible dialogue with the market, target customer needs, create new business opportunities, anticipate technology changes, select vendors, and products, and practice zero-dollar marketing. You can reach the author via email.

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