IBM warns AI boom is squeezing software budgets
IBM said corporate customers are shifting spending away from traditional software toward data-centre infrastructure as artificial intelligence expands, while June 2026 wholesale price inflation also rose on a 2022–23 base year.
- IBM said its performance has been slipping because corporate customers are redirecting spending away from traditional software toward data-centre infrastructure.
- IBM forecast revenue for the coming quarter below analysts’ expectations.
- Wholesale price inflation increased in June 2026 compared with May.
- The June 2026 wholesale price inflation figure was released on a 2022–23 base year.
What happened
IBM said its performance has been slipping because corporate customers are shifting spending away from traditional software toward data-centre infrastructure as the impact of artificial intelligence expands. IBM also forecast revenue for the coming quarter below analysts’ expectations, and the warning was followed by a sharp drop in the company’s shares and broader weakness in the software sector.
The same source also reported that wholesale price inflation increased in June 2026 compared with May on a 2022–23 base year. The rise was attributed to higher prices in both food and non-food categories.
UPSC may connect artificial intelligence-led shifts in corporate spending with broader questions on digital infrastructure, productivity, and sectoral adjustment. The wholesale price inflation reference can also be used to test the Wholesale Price Index, base year changes, and the difference between food and non-food inflation.
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