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- 00:00The way that I look at this is it’s a very interesting go to market channel for you, a sales channel. Think about all of the clients that IBM has and how you’ve tried to grow the company. Explain how people will access help use through this? Well, through the cloud matrix. Absolutely. It’s an extraordinary opportunity for both of us. IBM is going to have their sellers sell across skew. And so now you’ll be able to directly access our speed, the advantages that we offer. You could think of it a little bit like offering broadband in the era where dial up wasn’t fully rolled out and people were still trying to connect to the Internet or LPs or just significantly faster. But we also keep the cost down. Just imagine if you were to offer broadband and you charged more per bit of data that was sent over the line, you would be on economical broadband increases the demand with a gigantic use cases. It’s particularly important to reduce the speed. You don’t ask a question, wait 10 minutes later and come back. You’d rather get the answer in under a minute. Rob. Under this arrangement with Jonathan, does IPM make any sort of financial investment into Grok or is there some kind of sales or revenue split? Explain the economics of this deal for you guys. Big picture, we have a lot of momentum in AI with Watson X, as we said on our earnings last quarter, seven and a half billion dollars as a book of business and we’re trying to solve the client problem of how do they deploy AI faster. So this partnership is all about what Jonathan said, which is five X performance at 20% of the cost. We’ve seen it with Watson X running on Grok, and so we will be distributing Grok as part of our go to market and there’s a revenue share as part of that. But we are really excited because we’ve seen clients already getting an impact to how they’re deploying AI because of the integration of our technology together. Let’s talk about that, Rob, a little bit more, because you’re the man who’s in charge of the software business. You’re also really responsible for the world revenue and profitability of your company. So help us understand why Grok was the obvious choice. How is it helping your clients get answers faster on the inference side of things? We looked at every possibility in the market and the clients are looking for significant performance, so something that changes how your call center operates or how your supply chain runs. And then you combine that with a fraction of the cost. Suddenly the economics make sense. AI does have a cost problem and we think this breaks through that. In IBM, we’ve said we’re going to drive four and a half billion of productivity by the end of this year. That’s another example of AI truly having an impact. And the number one question I get from clients now is how are you doing that at IBM? And can you help us do that? And we think the combination of IBM and Grok can make this a reality for any company. Let’s dig into that a little bit now with you, Jonathan, because the integration with what’s an ex orchestrate, what does that look like on your side? How does that happen and happen seamlessly? So the once an X API is available for anyone to use day, it’ll be invisible to most users. It’ll simply work. We have a compatible API and this is something we’ve been working on. We will also work on some lower level integrations with BLM, which is a technology that IBM is very deeply involved in, but it should just be transparent. You should just get more speed. Just imagine one day you come home, you had dialogue and now you have broadband and it costs less. Rob. Where’s the demand coming from on your side, like IBM, Granite or some other age and tech workload that they want to run using the Grok use? Are these public sector names? Are they private sector SMEs? I’m trying to understand who you’re serving with it. As often happens, I would say financial services have been early adopters, but the thing that has changed in the market in the last six months is everything is moving to multi model. We have IBM models that we open source which are the granite models. We announced a partnership with Anthropic. We have a partnership with Mistral and Llama, just to name a few. What is incredible about what Jonathan and team have built is any model can run and get instant improvement running on the LP used from Grok. So I think this is a combination of a multi-model world accelerating inference with Grok. I think this is a great combination. Jonathan, does this capacity already exist or are you supply constrained still? You’ve got to go out and build it either in Saudi, Finland, here in the States. So the entire world is supply constrained and I would actually expect that to continue for at least the next 5 to 10 years. When it comes to I, our advantage is that we have a supply chain that actually ramps much faster. So customers will be able to come to IBM, put in an order and we will be able to fulfill that faster than you would be able to with other technologies. But the supply constraints are real, and this is another reason to start working with IBM sooner. The sooner you get access to that capacity, the sooner you’re going to have it. I can’t tell you how many start ups come to us and other companies come to us and they are looking for capacity because some of them are actually growing ten, 20 or even 30% per week or per month, which is an astronomical growth rate. But by approaching us early, we can build to your needs. You were just mentioning, Rob, about all the partnerships you have when it comes to alums and the offerings that you’re intertwining within yours. Will you go to others to ensure that inference is as fast as possible? Or is it this exclusive with grow? We are open to working with anybody in the ecosystem of AI around what we’re doing. Specifically on the acceleration with Grok. We want to lean into this partnership. That’s why this is the one that we’ve announced today, because we have confidence working together with Grok. As Jonathan mentioned, we’re also enabling some of the lower level technologies in open source like Vila LEM. So this is the right place to be when it comes to inference. But when you think broadly about what’s happened in AI. We have many companies working with us on agents. Last week we announced S & P Global is now running on Watson X Orchestrate as an example. So we’re always open to new partnerships. And let’s just talk about, Jonathan, the go to market strategy here of teaming with the age old juggernaut that is IBM that has so many deep relationships across global enterprises. But is that how you’re going to work this going forward is teaming up with companies that have those legacy relationships, or do you still go out there and win the business yourself? So I would say this is a peanut butter and jelly sort of relationship in the sense that oftentimes when we meet with C-level executives, those C-level executives turn to their tech teams and ask them to evaluate Grok. And I’ve been in meetings where the CTO did that, and the response from the person is, I already use Grok, it’s my default for everything. So we already have the bottoms up. We have 2.3 million developers already building on us. For comparison opening. I has 4 million now going to those deep relationships from IBM and the fact that IBM is a trusted partner who’s been delivering for decades. You put those two together and that’s an amazing go to market motion.
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IBM, Groq Partner to Offer High-Speed Inference
October 20th, 2025, 8:36 PM GMT+0000
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