IBM CEO: Customer demand postponed, not lost IBM CEO Arvind Krishna addresses lack of second-quarter earnings, clarifying delays in capital spending deals and outlines IBM’s strategy to encourage consumption-based deals on “The Claman Countdown.”
IBM CEO Arvind Krishna has set the record straight on fears of a long-term technology slowdown, revealing that a third of large corporate deals delayed during a difficult second quarter have since been returned to the company.
Speaking on “The Claman countdown”, Krishna explained that a significant increase in the price of semiconductors forced enterprise customers to briefly shift their spending toward physical servers.
Although this spending shift hurt IBM’s initial software sales, Krishna said artificial intelligence remains a major growth driver and delayed deals are already coming back.
“A third of all transactions that came through in the second quarter have already come back. So that gives us a signal, maybe not proof yet, but a signal that this was actually just a postponement for a few weeks, not a kill,” Krishna said Thursday.
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IBM CEO Arvind Krishna, center, and FBI Director Kash Patel attended a Diwali celebration with President Donald Trump and Indian American leaders in the Oval Office of the White House October 21, 2025 in Washington, DC. (Andrew Caballero-Reynolds/AFP via Getty Images / Getty Images)
The statement comes a day after IBM cut its full-year revenue growth forecast from more than 5% to 4% or 5%.
Earlier this month, IBM issued earnings warning after chip hardware prices soared nearly 60%. This increase has prompted many Fortune 100 companies to prioritize physical hardware purchases, leaving less money for their software budgets. This led many customers to delay their software purchases from IBM, contributing to a decline in the company’s shares.
“When these go up 60% year over year, people get worried, and that’s classic inflation: If it’s going to go up that much, I have to buy it now,” Krishna said. “And so, I’m redirecting my CapEx in that direction.”
But Krishna said the slowdown was only temporary as companies were slow to implement their targets. software orders. However, he said the company was working to prevent this from happening in the future by changing its sales strategy.
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While 80% of IBM’s software revenue comes from subscription contracts, 20% comes from upfront purchases, which have been hit by customer delays.
IBM CEO Arvind Krishna attended a Rose Garden Club event at the White House on July 6, 2026 in Washington, DC. (Getty Images)
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“We need to focus more on growing the 80% and not depend on the rapid growth of the 20%,” Krishna said.
He noted that the company is also doubling down on quantum technology, highlighting its recent acquisition of quantum research laboratory HRL Laboratories. He said the move allowed IBM to become a leader in a new market.
IBM CEO Arvind Krishna speaks at an Economic Club of New York event on June 17, 2026 in New York. (Adam Gray/Bloomberg via Getty Images / Getty Images)
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“We believe that quantum is an extremely important technology for national security but also for economic advantage,” said the IBM CEO.
“So now we’re kind of increasing our total investment and increasing the different alternative technologies that we have in our portfolio, which just increases the chances that we’re one of the winners and that we get quantified. I think I’m going to now increase my estimate to where quantum by the end of the next decade will probably have a trillion-dollar impact on the industry.”
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