IBM Books 80% of New AI Business From First-Time Clients

International Business Machines Corp.’s push into enterprise artificial intelligence is attracting a fresh base of clients, with 80 percent of its generative AI business orders now coming from new customers, according to the company’s finance chief. The disclosure suggests IBM’s focus on hybrid cloud and AI is gaining traction beyond its installed base, a critical factor as it competes with giants like Amazon Web Services, Microsoft Azure, and Google.

"I don't think we've ever raised guidance in a first quarter," IBM's finance chief, Jim Kavanaugh, told analysts, signaling a position of prudent operation even as the company's AI segment shows strong adoption. Kavanaugh also downplayed the impact of component costs on the company's performance, stating that rising memory prices have had a "negligible impact" on overall results.

The new-customer metric adds crucial context to IBM's recent first-quarter results, where the company reported revenue of $15.92 billion and adjusted earnings of $1.91 per share, beating LSEG consensus estimates of $15.62 billion and $1.81, respectively. The software segment, which houses the AI offerings, saw revenue grow 11% to $7.05 billion. Despite the strong quarterly performance, IBM shares slipped 6% in extended trading after the report as the company maintained its full-year guidance, a move Kavanaugh described as consistent with being a "prudent operator."

This influx of new clients is a direct payoff from IBM’s strategy to build a comprehensive enterprise AI ecosystem. The company is betting that by providing the tools, consulting, and platforms for businesses to build and manage their own AI, it can carve out a durable niche in a market where many enterprises are still in the early phases of adoption, as highlighted by recent TDWI research showing only 40% of companies are seeing measurable value from AI yet.

From Partnerships to Platform

IBM has been aggressively assembling the pieces of its enterprise AI strategy through acquisitions and partnerships. The recent $11 billion acquisition of Confluent, a data-streaming specialist, is central to this plan. The deal enables IBM to provide a unified data foundation for AI models and automated workflows, allowing them to operate with real-time context across different computing environments.

During the first quarter, IBM also announced a series of strategic collaborations to embed its technology deeper into enterprise workflows. A partnership with AI voice company ElevenLabs integrates advanced speech-to-text capabilities into IBM's watsonx Orchestrate platform. In consulting, IBM is working with SEI Investments to use agentic AI for enterprise transformation and with E.SUN Bank to create Taiwan's first AI governance framework for the banking sector. These deals are designed to generate incremental revenue and solidify IBM's role as a trusted AI partner for large businesses.

Navigating a Crowded Field

While the new customer growth is a positive signal, IBM faces intense competition. Amazon Web Services and Microsoft's Azure remain the dominant forces in cloud computing, the primary platform for AI workloads. Google is also making an aggressive, vertically-integrated play for the "agentic enterprise," committing nearly $185 billion in capital expenditures for 2026 to build out its infrastructure.

Furthermore, new threats are emerging from specialized AI firms. Anthropic, for instance, has developed a tool that automates the modernization of COBOL code, a foundational language for IBM's mainframe business. While IBM executives have stated that AI strengthens the case for mainframes, Anthropic's tool represents a direct challenge to a core part of IBM's legacy business. The company's ability to convert its 80% new-customer pipeline into sustained, long-term revenue will be the key determinant of its success in this new chapter of the platform wars.

This article is for informational purposes only and does not constitute investment advice.