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Arvind Krishna

lines on the record: 81
first: 2025-12-01
most recent: 2025-12-01
sittings or episodes: 1
sources: podcast

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“Has, let's call it a thousand, you go across the number of enterprises times a thousand, then that unlocks a lot more, if that makes sense.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“An agent or an AI frontend that helps unlock even more and puts together four or five things that I have to put together in my head. I completely agree with you. Why wouldn't we want that to go happen? That is going to go happen. You can see the early instances of that already happening. And now why it's so appealing is because it gives a chance to people without me taking any names to reform who are the biggest players and it gives a chance that there will be some disruption. And then the other side, I actually think it goes beyond consumer into the enterprise. I actually believe there's going to be a billion new applications written. Now, if you think about the smartphone ecosystem we talked about, people talked about half a million, a few million. I think this could be a billion because there may be a few million that sit on the consumer side. And then if every enterprise...”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“If you don't mind, maybe I'll go a little bit deeper under your first watch. Absolutely correct at the front end of the economy kind of moved on to the phone. The moment the phone gave you access so that it could be with you everywhere, you were not just anchored to a desk with a laptop or a desktop, it definitely was a massive unlock. Let's acknowledge that, right? But there is a physical economy still. I mean, I always talk about 60% of the workers, even the United States, are still frontline, people who do construction, people who have warehouses. If you're buying a tangible goat is still coming from a warehouse, maybe not from a retail store near you because they had a front end, but in the back there's a warehouse and a truck driver and maybe multiple routes of distribution. We still go to restaurants. There's still a food. There's still groceries. There's physical health care. There's all of that. It becomes more efficient, easier, more convenient. So if I now say, I don't want to spend that much time, I'm going to have...”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“But it was very exciting. It did go down, and then today you would turn down and say, but all the companies that got built on the back of that clearly proved that that investment was worthwhile. If I look at it at a national or an aggregate investor level, while some people did lose a lot of money, by the way, some people made a lot of money.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“You're right, the fiber in the ground is endurable. Maybe not forever, but at least for 100 years. At some point, even glass actually begins to occlude and do all kinds of weird things, but it's good for 100 years. But people also built a lot of end stuff on top, all of which have to be thrown away. I mean, like you're now forgetting all the failures people are building ATM. People thought that they were to build really intelligent video streaming and put the guts of that inside. People were talking about doing wavelength division multiplexing since you talked about Sienna. In the end, it became simpler. Here's dark fiber. It's a dumb pipe. Go throw your bits in it at a terabit. The intelligence belongs to the cloud end. That took 10 years to fold. So there was actually a change in how it transpired. I mean, I'm sorry to be that geeky about it.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“Think that the specific comparison to fiber I'm making, and maybe it's too pedantic, but the fiber is in the ground, and then it was there, right? It did not incur a recurring cost to the people who wanted to use it. Outside of can you create more capacity by multiplexing the fiber.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“Worries about moving stuff around, but you can detune it slightly and get to higher resilience. So I think that is actually a design point. That's not really a bug, so to speak. Now over time, do I acknowledge that these will move up? I began by saying I think in five years our semiconductors will be 100 times better. So you're right. There's a five-year depreciation to the GPU or the sort of the compute infrastructure, but the other half is useful. But in five years, you don't throw away all the CapEx. You throw away a little piece and you replace that with something that is better at that point.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“No, no, no, no. So let's decompose it. So you're building a physical data center that's a lot larger. I think concrete and steel survive. Next to it is a power plant. We need the electricity Actually, over time, I believe those power plants will even get hooked up to the grid, which is even better than for the national infrastructure. That's useful. Now, the fiber coming out of them, the networking inside these places, the storage inside these places, the CPUs inside these places are all useful. I'll acknowledge right now there is a very high failure rate, but being a bit of a semiconductor geek, though I'm not anywhere near as deep as some of my friends and compare it as in those spaces, if you can run something at 3 gigahertz, if you try to run it at 4, it will actually run, has a higher failure rate. If you try to run it at 300 watts of power, maybe it's great if you run it at 400, it has a higher failure rate. So if today you just need the performance so you can train a model that much faster, it actually is worth it to tune it that I'm okay to have that failure rate. I got software that”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“Might be an H200, or the chip you're investing in with Grock might displace the H100. So all of this Capex is not going to be here 30 years from now for the next generation of entrepreneurs like Gary to build upon and create more capacity with. We're just going to throw it away.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“Now, but my point being not all of that will see a return. By the way, if I go back to the fiber world, I would look at you and say, if I look at fiber optics in the ground back in the year 2000, not all of those people got a return. However, this is the beauty of capitalism, and I'm calling it a beauty. We spend the money. It gets corrected back to 30 cents in the dollar. At that point, it makes an incredible amount of sense for somebody else to get that asset and turn it into a profit stream. But it wasn't all got lost. As I said, two or three are going to make a ton of money and the others not. And so I think the equity being put in will actually get a return. Some of the debt will not.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“Allow you to go succeed, and you've seen that movie play out. That was social media in the last generation, going back 25 years. So I reacted with it makes sense for them. Now, if 10 of them are going to go compete, then we also know that maybe two or three of them will be the eventual winners, not all 10, and that massive scale world. So to me, it makes economic sense that they're chasing that.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“No. Do I believe that there will be some displacement and some of the capital being spent, especially the debt capital, will not get its payback? Yes. But let's just sort of look at it. So this is a place. There is a B2C and there is a B2B world. There is a lot of common tech in both, but let's just look at the B2C. If in the B2C you build a set of models that are very attractive and half a billion people become consumers of that, which is kind of the current numbers roughly, right? If you build a slightly better model by spending another $50 billion, and that can attract another 200 million users, seems to make economic sense. And if you can then spend another 50 and get another 200 million into yours, so this is a race towards who can get more and more of the world's 7.5 billion people to become subscribers on a given model because then the next bet becomes, well, that network scale and those economies of scale with”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“Even disrupt himself. Obviously leading towards the big question, which is this feels like a bubble. A lot of people think it's a bubble. You have a markedly different view of how this industry will play out. You're investing, I want to talk about the fact that you're hiring while some of your competitors are doing layoffs at huge scale. But let me just ask the question directly, and then we can go into everything else. Do you think we're in an AI bubble right now?”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“I think that always when you have an incredibly valuable company who's making its profit stream from a few products, there's an inherent or organic disincentive to try to modify that. That said, I would never bet against Jensen's ability to even disrupt himself and go towards the next plateau if there is one. So you have both. So I think certain companies are able to disrupt themselves. Others hesitate to do it. And that is actually what causes the up and down of companies in the tech in the tech world.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“Five years right now, I think feels like forever to most people living through this disruption. It feels like forever when you can see that hundreds of billions of dollars being deployed today in data centers that are running mostly NVIDIA GPUs. I look at all of that and you talked about Moore's Law. I actually see a massive disincentive for NVIDIA to come out with the next generation of its GPUs, right? There's a lot of equity tied up in the H100 being the literal unit of currency that these deals are taking place upon. That's a weird dynamic, right? But it sounds like you say there's going to be competitors that upend that dynamic.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“And Grock looks like, at least at our first steps, looks like a 10x cheaper. But that again is not going to be the only design possible. So I think you get a 10x advantage on the pure silicon side. You're going to get a 10x from the design side. And then the third piece. I think there's a lot of work to be done around memory caching, how you deploy these models, do a quantize them, do I compress them? Do I always need the biggest? So there's a 10x from the software side. You put those three 10s together. That's a thousand times cheaper. So I'm simply saying, hey, maybe we won't get all of it in the next five years, but even if you get the square root of that, that's 30 times cheaper for the same dollar to be spent. That's kind of why I believe this is going to play out. It is going to get a lot cheaper, but it'll take five years to play through.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“The processor company, yes, the word comes from computer science. A lot of people use the word. But yes, sorry. Yes, grock, the inference, the inferencing chip company.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“Then we'll come back to that What I meant by is go to get a lot cheaper. I mean, if I take a five-year orc What is the semiconductor industry shown time over time over time? Go back to the beginning of the PC. You have half a dozen competing technologies. Some begin to win. That was the beginning of Moore's law, really, right? Every two years, you get a 2x advantage in what you can do. So I look at the semiconductor side and I say over five years, we'll probably get a 10x advantage in the pure semiconductor capability, amount of compute for a dollar you can spend. Got it. That's one. Second, nobody has said that a GPU is the only architecture that is great for doing and deploying these large language models. There's certainly one. There are other companies coming up. We have a partnership with Grok. They have a different kind.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“I can, but I'm also going to, if you'll allow me to say there's a difference in the B2C world and the B2B world also. So first let's just talk about the cost. Are there huge amounts of capital and not just capital but also operating expense being spent on populating data centers with GPUs, building out those infrastructures and the amounts of capital being committed are now up in the trillions? It's absolutely true and that's what you just mentioned that, hey, that doesn't sound cheap. That doesn't sound a lot cheaper than before.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“That's the term that I'm really interested in, right? There were all these shots at AI before deep research being one of them. There were machine learning algorithms deployed broadly across the industry. Apple was talking about the neural accelerators and the iPhone years ago, but they didn't add up to what LLMs have added up to in the industry. I'm curious though, you said cost, and you said cost can come down. But you and I are talking at the end of an earnings cycle, and everyone's costs are skyrocketing, right? Their CapEx is skyrocketing. There's some layoffs associated with the increased CapEx. I do want to ask you about. But just purely on cost, it doesn't seem like it's that much cheaper, right? It seems like to win, you have to spend vastly more money. And that money does not at the moment have a defined ROI. There's a lot of bets. Can you reconcile the idea that it's less cost in this?”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“But if I compare from the beginning to the end, this is a 100x advantage in terms of speed and tuning and deployability. That now looks industrial scale. So that means I can now take AI plus these models can be tuned for many tasks, not just one, not all tasks. I'm not saying that, but many. That means that the applicability is massive. Also, when I want to ingest new data, I don't have to restart at the beginning. I can kind of add some. At some stage, it makes sense to restart, but I can do a bit more there. All of these are massive unlocks, which is why I think it's the right technology to help AI scale massively. By the way, I don't think it's the end all, but we'll come back to that. But it is 100 times better than the prior.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“A month or two months, I can use that model. I can get a lot of return. In an enterprise context, that's a little harder because it takes a lot more time to make up for all the costs that you put. So when LLMs came along, so to go back to the original work you referred to, it was sort of intent and massive amounts of data. Labeling goes away. Wow, that drops the cost by half. You do a brute force approach using lots more compute and lots less people. Wow, the cost comes even down because tech always gets cheaper over time. So now half a dozen people but using a ton of compute could do what previously may have been 30 or 40 PhDs, another 40 or 50 engineers, over six months. You can now do the task that much shorter. Okay, that's a huge unlock. So in the short it looked like a 2x advantage, a 4x.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“Sure In the deep learning era, let's call that 2010 through 2022, through that 12 years, deep learning made incredible progress. No question about it. Here was the catch. Deep learning to me was incredibly bespoke. You could take a lot of data. You applied a lot of people to label that data. It could do one task incredibly well. It really could. But tasks don't stay static. The data changes. The tasks change. If I have to redo all that work of the human labeling, the relearning, the retraining, I'm calling that bespoke and fragile. So the return was always a little bit out there. If you have a massive singular B2C task, maybe suggesting which photograph you may love or maybe picking which ad you may love, that applies. It's worth it because”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“Can you draw the connection between that set of technologies and LLMs today? The counter argument that I would give to you is, you know, I'll just pick on Google. Google has had a number of bets across machine learning and deep research and LLMs for a long time. They shut off LLMs early, early. I remember soon they were demoing, like, I can talk to Pluto and no one knew what he was talking about. And then three years later, ChatGPT happened and Google was like, wait, we invented all of that. And that was their, you know, that was their technology bet. That was their paper attention is all you need. You're saying you had it, but it feels to me like there was actually an inflection point where the industry picked a different technology. They picked LLMs. So can you just draw the connection for me?”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“Take another one. We were trying to give it to you monolith. That's what I meant by monolith. And that was the wrong approach, just to be straightforward. Right technology, wrong go-to-market approach.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“It's literally the same technologies that we talk about. So LLMs were not known at that time, but sort of, I'll call it various other neural network models were. You know, neural network models all scan all the way from what we would call machine learning to what was beginning to be called deep learning. And so what was inside the Watson at that time was a mixture of machine learning, a lot of statistical learning, which became the core of what became deep learning. Let me just note the first big deep learning algorithm was a year after Watson 1 Jeopardy. Watson 1 Jeopardy in 2011, 2012 was sort of the term came to be. But I will call it the early incarnations of those things were in there. Unfortunately, they were not there in a way that you could tune them, take one out, make it modular.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“Brand is all about. So let me push on that a little bit. You just read Watson as a computer and it was a single computer that could go play Jeopardy. And then you describe the introduction of LM technology and now this sort of...”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“The world is ready to take these things as building blocks. Engineers want to open it up. They want to see Inside there. They want to build their own applications. I want to use it for this, but not that. And so whenever We got a chance to say And let's give The P spots, but also a lot eas And so So”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“Kind of what we are really about today. I think a lot of people know the Watson brand, which IBM has talked about for years, famously Watson competed on Jeopardy. Now that I think the brand has turned into Watson X, there's a lot of what I would call like airport and football advertising around Watson, aimed, I think, directly at CIOs of companies and not at consumers. But we're still all experience at advertising. How does Watson fit into the IBM brand? Because I think that's what people really hook onto. If we think about the Watson brand, It did really well initially in putting AI on the map. And that shocked people. Oh my god, first time really. Could understand human language Quest More right than wrong. I don't say perfectly right, but more right. Woke people up, I think, to the”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“A lot of consumer products. We did the type. Kind of knew it was iconic. Not been here for more than 20 years. Consumer things along the way. Carity for We really had no consumer products. So, what does IBM do is to help our clients deploy technology. their business As you think about that, whether they're on multiple public clouds Want to take advantage of the data, they want to get to their customers faster.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT
“Bet still isn't making useful products for most people, but you'll hear Arvin explain why he has so much faith. This is a good one. He went to all places, and Arvin was remarkably candid. Okay, Arvind Krishna, CEO of IBM. Here we go. Marvin Krishna, you're the CEO of IBM. Welcome to Dakota. Neile, great to be here with you. I am excited to talk to you. IBM is one of the most famous companies in the world. Candidly, I think most consumers don't know why anymore. It's very much an enterprise company. They have a lot of businesses. You have been there for 35 years. What has IBM been and what are you trying to make it today? You're right. IBM is an enterprise. It's a B2B company to use a more common parlance as opposed to a B2C.”
2025-12-01 · Decoder with Nilay Patel · IBM CEO Arvind Krishna says there is no AI bubble after all · IDENTIFIED FROM THE TRANSCRIPT