February 10, 2025

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International Business Machines Corporation (IBM) Shares Surge 10% After Q4 Earnings Beat, AI and Cloud Strategy Drive Growth

International Business Machines Corporation (IBM) Shares Surge 10% After Q4 Earnings Beat, AI and Cloud Strategy Drive Growth

We recently compiled a list of the 10 Trending AI Stocks on Investors’ Radar. In this article, we are going to take a look at where International Business Machines Corporation (NYSE:IBM) stands against the other AI stocks.

The US is struggling to keep its technology within its borders, a goal that the US government and most of the country are determined to achieve to maintain dominance, particularly in AI. In this regard, ChatGPT maker OpenAI has recently complained that its competitors, including those in China, are using its work to advance in developing their own artificial intelligence (AI) tools.

READ NOW: These 29 AI Electricity and Infrastructure Stocks Are Crashing Due to DeepSeek News and 10 AI Stocks to Watch Amid the DeepSeek Buzz

Bloomberg reported that Microsoft, a major investor in OpenAI, is currently investigating whether any data belonging to the AI startup has been used in an unauthorized manner. White House “AI and crypto czar”, David Sacks, seems to agree with OpenAI’s allegations. Sacks suggested that DeepSeek may have used OpenAI’s models to get better, a process known as knowledge distillation.

“There’s substantial evidence that what DeepSeek did here is they distilled the knowledge out of OpenAI’s models. I think one of the things you’re going to see over the next few months is our leading AI companies taking steps to try and prevent distillation… That would definitely slow down some of these copycat models.”

Nevertheless, DeepSeek’s AI models demonstrate how previous sanctions and export controls by the US have failed to curb competition. Investment firm Morgan Stanley, speaking of the broad market reaction on Monday following the emergence of DeepSeek’s cheaper and more efficient AI models, stated that the consequence may be a reduced spending interest or even tighter export controls.

“The DeepSeek release highlights evolutionary innovations in AI, some of which may be deflationary. That said, the stock market reaction is probably more important than the cause and could bring further export controls or reduce spending enthusiasm”.

It must be noted here that the technology behind DeepSeek’s r1 model Wall Street is raving over isn’t new, but what is surprising is the claim that it has been developed cheaply, and also using less powerful chips.

“The takeaway is that there are many possibilities to develop this industry. The high-end chip/capital intensive way is one technological approach. But DeepSeek proves we are still in the nascent stage of AI development and the path established by OpenAI may not be the only route to highly capable AI.”

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