IBM pledges to invest $150B in the US over the next five years – News

IBM Corp. today announced plans to invest $150 billion in the U.S. over the next five years.

According to the company, more than $30 billion will be allocated to research and development activities. The engineering initiative’s priorities are set to include mainframes and quantum computing. IBM didn’t go into detail about its research priorities in those areas.

The investment plan, and in particular its sizable price tag, drew some skepticism on Wall Street. D.A. Davidson analyst Gil Luria told Reuters that the “bombastic figure is more likely a gesture towards the U.S. administration.”

IBM’s announcement of the initiative comes a few days after it disclosed that DOGE had canceled 15 of its contracts with the U.S. government. According to the company, those agreements amounted to “less than $100 million of backlog over a duration of multiple years.” That sum represents a small fraction of IBM’s annual revenue, but its shares nevertheless fell more than 6% on the day of the contract cancellations’ disclosure.

The company’s mainframe business, the first focus of the $30 billion-plus research initiative, makes its systems at a facility in Poughkeepsie, New York. The business introduced its newest product earlier this month. The IBM z17 can run more than 450 billion artificial intelligence inference operations per day, 50% more than the company’s previous-generation mainframe.

The z17 is powered by a custom processor called the Telum II. It has eight cores running at a frequency of 5.5GHz, 40% more cache than IBM’s previous mainframe processor and an AI module. Customers can optionally add more compute capacity by attaching a PCIe-based machine learning accelerator, Spyre, that includes 32 cores.

The mainframe keeps its data in a new iteration of IBM’s DS8000 storage system series. The latest version promises less than one second of downtime per year, as well as automated failover in the event of technical issues. A feature called Safeguarded Copies allows customers to keep their information in an immutable form to prevent ransomware from deleting it.

IBM’s quantum computing unit, the other focus of its new research and development investment, likewise makes regular updates to its hardware portfolio. 

IBM debuted its latest quantum processor, the Heron R2, last September. The chip features 156 qubits made from superconducting materials. During internal tests, the Heron R2 completed a computing experiment 50 times faster than IBM’s previous-generation quantum processor.

“We have been focused on American jobs and manufacturing since our founding 114 years ago, and with this investment and manufacturing commitment we are ensuring that IBM remains the epicenter of the world’s most advanced computing and AI capabilities,” said IBM Chief Executive Officer Arvind Krishna.

Image: IBM