{"slug": "ibm-loses-70-billion-in-a-day-after-ceo-admits-ai-missteps", "title": "IBM Loses $70 Billion in a Day After CEO Admits AI Missteps", "summary": "IBM shares plunged 25% on Tuesday, erasing nearly $70 billion in market value, after CEO Arvind Krishna admitted the company had faltered on artificial intelligence. The warning highlighted that AI is reshaping enterprise budgets, with clients shifting spending toward infrastructure and away from IBM's legacy portfolio of mainframes, software, and consulting. The sell-off also dragged down other software stocks including Microsoft, ServiceNow, Salesforce, and Intuit.", "body_md": "**July 15, 2026**, (Inside AI) — IBM shares plunged **25%** on Tuesday, erasing nearly **$70 billion** in market value, after CEO **Arvind Krishna** admitted the company had “faltered” on artificial intelligence. The sell-off put IBM on course for the largest single-day loss in its **115-year** history, surpassing even the **1987** “Black Monday” crash.\n\nKrishna told investors that clients abruptly shifted spending toward servers, storage, and memory to secure supply-constrained infrastructure ahead of expected price increases. “In the last few weeks of June, we saw clients shift their quarterly capex spend toward servers, storage, and memory purchases to secure supply-constrained infrastructure ahead of expected price increases,” he wrote.\n\nThe warning crystallized a brutal reality: AI is reshaping enterprise budgets, and IBM’s legacy portfolio—mainframes, software, and consulting—is getting sidelined. Several large deals failed to close as expected, forcing the company to forecast second-quarter revenue of just **$17.2 billion**, below the **$17.86 billion** analysts expected.\n\nKrishna’s candor rattled the broader software sector. **Microsoft**, **ServiceNow**, **Salesforce**, and **Intuit** all fell between **2%** and **5%**. The rout reflects a market reckoning: the AI boom is a zero-sum game for legacy vendors that failed to pivot fast enough.\n\n“This is an ugly moment for IBM and software stocks... the big question will be how long the shift to infrastructure and cybersecurity lasts,” **Chris Beauchamp**, chief market analyst at **IG Group**, told Reuters.\n\n“A few more months might be bearable, but more than that and serious questions will be asked all over again about software stocks.”\n\nIBM’s mainframe business, which processes transactions for banks and airlines, is expected to report weaker performance. Krishna also noted that cybersecurity spending is surging as AI makes attacks more sophisticated, citing **Anthropic**’s advanced **Mythos** model, which can uncover software vulnerabilities.\n\nThe company has tried to reposition itself around high-margin assets like **Red Hat** and quantum computing. It vowed to invest over **$10 billion** to build the first large-scale quantum computer by **2029**, and has AI partnerships, including with **OpenAI**. But these bets remain nascent and cannot offset the core business erosion.\n\nKrishna acknowledged the misstep: “While we anticipated some supply-chain related impact in our expectations, we did not anticipate the magnitude of the capex reprioritisation.”\n\nThe sell-off underscores a broader industry tension. As **SoftBank**’s **Masayoshi Son** recently predicted AI will need **$5 trillion** per year by **2040**, enterprises are funneling budgets into chips and infrastructure, starving traditional software and services. IBM’s plight shows that even a **115-year-old** tech icon can be blindsided when it fails to adapt to tectonic shifts.\n\nIBM will report full second-quarter results on **July 22**. Investors will watch for any signs that the infrastructure spending wave is temporary—or whether it marks a permanent realignment that leaves legacy software firms behind.", "url": "https://wpnews.pro/news/ibm-loses-70-billion-in-a-day-after-ceo-admits-ai-missteps", "canonical_source": "https://insideai.news/news/ai-in-business/ibm-loses-70-billion-in-a-day-after-ceo-admits-ai-missteps/4252/", "published_at": "2026-07-14 19:14:35+00:00", "updated_at": "2026-07-14 19:23:31.146372+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-infrastructure", "ai-policy", "ai-startups"], "entities": ["IBM", "Arvind Krishna", "Microsoft", "ServiceNow", "Salesforce", "Intuit", "IG Group", "Chris Beauchamp"], "alternates": {"html": "https://wpnews.pro/news/ibm-loses-70-billion-in-a-day-after-ceo-admits-ai-missteps", "markdown": "https://wpnews.pro/news/ibm-loses-70-billion-in-a-day-after-ceo-admits-ai-missteps.md", "text": "https://wpnews.pro/news/ibm-loses-70-billion-in-a-day-after-ceo-admits-ai-missteps.txt", "jsonld": "https://wpnews.pro/news/ibm-loses-70-billion-in-a-day-after-ceo-admits-ai-missteps.jsonld"}}