Jonathan Ross and Rob Thomas Talk Groq and IBM Partnership
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IBM and Grok are announcing a strategic partnership to give clients ultra high speed, low latency AI capabilities via Grok's inference technology. For more on how this partnership is going to provide greater access to the full potential of enterprise AI, we're joined by Rob Thomas, senior vice president of software and chief commercial officer at IBM, and Jonathan Ross, CEO and founder of Grok. And Jonathan, I want to start with you. You know, the 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 LPUs through this or through the Cloud Matrix.
Absolutely. It's an extraordinary opportunity for both of us. IBM is going to have their sellers sell Grok SKU. 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. Our LPUs are 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, it would be uneconomical. Broadband increases the demand. With agentic use cases, it's particularly important to reduce the speed. You don't want to 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 IBM 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 is we have a lot of momentum in AI with Watson X. As we said on our earnings last quarter, $7.5 billion 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 5X 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. 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.
What is the strategic partnership between Groq and IBM about?
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 Grop 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 $4.5 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 Watson X Orchestrate, what does that look like on your side? How does that happen and happen seamlessly?
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