Biggish Blue Boss Ginni Rometty claims AI will enable business to improve on an exponential curve – something that only happened twice before.
She claimed AI will provide the world with a third moment of “exponential impact” to rival Moore’s Law and Metcalfe’s Law. She claimed the data and AI “revolution” currently afoot represents a moment that occurs only once every 25 years.
“If you think back in history over the last 60 years, there have only been two times when technology has allowed businesses to improve on an exponential curve, instead of just linear”, Rometty said.
“It was once something called Moore’s Law – that chips and processing would double every 18 months. That led to the automation of everything as we know it.
“Then there was something called Metcalfe’s law. Technically, it says the value of a network is equal to the square of the nodes on the network. That is what gave rise to the platform companies, be it Facebook or Google.
“I think everyone would say those two moments in time have profoundly changed life as we know it. But I would tell you that we stand one more time at another exponential moment. Here’s the formula: think of all the data in the world, add tools like AI, and what companies and people will be able to do is have exponential learning, and if you have exponential learning it is the ultimate competitive advantage: you will outlearn other people.”
Rometty said that this new ‘law’ might one day be referred to as ‘Watson’s Law’ as she gave some examples of how IBM’s AI was being used to help companies and society “outlearn”.
Big Blue has been sued by a shareholder who thinks the company committed securities fraud by failing to write down a money-losing semiconductor unit before agreeing to pay another company $1.5 billion to take that unit off its hands.
In October IBM’s said it would sell the unit to GlobalFoundries (GloFo) and take a related $4.7 billion pre-tax charge.
IBM also announced third-quarter results that day. Its share price fell nine percent over the next two trading days, wiping out more than $18 billion of market value.
According to the complaint, IBM inflated its stock price before selling the semiconductor unit by carrying the unit’s property, plant and equipment assets on its books at $2.4 billion, when it should have known the assets were worthless.
The shareholder moaned that potential bidders had been unwilling to pay much more than $1 billion for the entire unit, including intellectual property and personnel, suggesting that the hard assets had no or negative market value.
The shareholder in question is the City of Sterling Heights Police & Fire Retirement System in Michigan. It also named three IBM officials as defendants, including Chief Executive Virginia Rometty.
It seeks class-action status on behalf of shareholders.
“Defendants presented a misleading picture of IBM’s business and prospects,” the complaint said. “When the truth about the company was revealed to the market, the price of IBM common stock fell precipitously.”