It was another dramatic week in the tech world, with IBM Corp. making waves with its stock soaring to its best day since 2000.

In the latest episode of the CUBE Podcast, theCUBE Research analysts John Furrier (pictured, left) and Dave Vellante (right) broke down what’s going on with IBM stock and what it means for the industry more broadly. That subject was the focus of a recent post from Furrier on LinkedIn. It’s possible that IBM has received a gift from DeepSeek, according to Furrier.

“There’s a class of companies … that their entire value proposition of their bet for their AI strategy is kind of confusing,” he said. “But a lot of smart people, like Arvind [Krishna] over at IBM, Matt Hicks, who’s the CEO of Red Hat, which is now part of IBM, companies that are in this position where they have this bet and their strategy that’s hard to tell was completely unpacked by DeepSeek.”

IBM stock and DeepSeek’s ChatGPT moment

DeepSeek just had its own ChatGPT moment — the kind that shakes the world, capturing attention like when ChatGPT first amazed consumers and made AI feel like pure magic, according to Furrier. DeepSeek was a nerdy, software version of that same effect.

“The DeepSeek moment was, ‘Wow, there’s innovation that wasn’t seen by a lot of other people,’ and we unpacked that last week. IBM has been doing it,” Furrier said.

While nuanced, DeepSeek actually benefited IBM, according to Furrier. IBM would tout their Granite models in their investor meetings, highlighting their performance and cost.

“As cost continues to drive down very, very low and speeds are increasing and performance is increasing, we’re in this cycle of innovation supercycle, as you call it,” Furrier said. “The DeepSeek moment is an enterprise AI moment for people like IBM who don’t have the big cloud.”

The DeepSeek moment, as Furrier noted in his blog post, highlights the intricacies of model integration, with IBM effectively brokering an integration layer for its install base, startups and developers. That’s leading to a new moment, according to Furrier.

“That’s going to be a Cambrian explosion of new kinds of developer motions versus the classic old school, ‘Hey, here’s a developer environment; build on it and extract rents from that,’” he said. “Not anymore. I think it’s going to be more of a very collaborative connected integration.”

DeepSeek has turned on the lights to the value proposition of integration, according to Furrier. IBM has been doing that for more than a year and a half, and IBM stock is responding accordingly.

Cloud shifts as AI dominates

It’s clear that amid a spike in IBM stock, the company isn’t pivoting but accelerating, making for an interesting landscape ahead. There’s also some interesting trends at play for cloud vendors, according to Vellante.

“My Breaking Analysis this week is ‘Investors cool on cloud but CEOs double down,’” Vellante said. “Sundar and Andy and Satya and Zuck, I mean, they understand well exponential growth. They have some of the smartest people in the world working on these things and, literally, they’re going to spend over $300 billion next year on CapEx because of AI.”

In a recent Microsoft Corp. earnings call, the company said that the problem they had in cloud was non-AI execution, though they didn’t use that word, according to Vellante. The company instead used a term like “scale execution.”

“What they meant was, ‘Our partners didn’t have their shit together, and they weren’t selling the old stuff; they were over-rotating to AI because it’s so hot,’” Vellante said. “Well, but what does that tell you? And how many times have I said, John, the old stuff is flat to down, the new stuff is hot, and it’s growing triple-digits, but it’s not big enough to offset the decline in the old stuff.”

Event calendar update and a look ahead

As event season shapes up, it’s becoming clear that the calendar will likely be the busiest theCUBE has seen since 2018 in terms of activity, according to Furrier. That includes the upcoming team-up with the New York Stock Exchange for a Super Studio event, welcoming Silicon Valley’s top CMO leaders innovating in artificial intelligence initiative on Feb. 14.

Looking ahead to the months to come, wave one was the ChatGPT moment of hype and experimentation, wave two saw widespread RAG search implementations but stalled in POC purgatory, and now developers are poised to drive real value, Furrier pointed out. What’s next could lead to more instances like what just took place with IBM stock.

“You’re starting to see people figure out this DeepSeek-like style with the developer productivity coming over the top. I think you’re going to see a breakthrough,” Furrier said.

Watch the full podcast below to find out why these industry pros were mentioned:

Matt Hicks, president and CEO of Red Hat
Lou Gerstner, former CEO of IBM
Samuel J. Palmisano, former CEO of IBM
Ginni Rometty, co-chairman of OneTen, former CEO of IBM
Arvind Krishna, chairman and CEO of IBM
John F. Akers, former CEO of IBM
John Roese, global CTO and chief AI officer of Dell Technologies
Ric Lewis, SVP of infrastructure at IBM
Sarbjeet Johal, founder and CEO of Stackpane
Jim Zemlin, executive director at Linux Foundation
Sam Altman, co-founder and CEO of OpenAI
Tony Baer, principal at dbInsight LLC
Sundar Pichai, CEO of Google and Alphabet
Andy Jassy, president and CEO of Amazon
Satya Nadella, chairman and CEO of Microsoft
Mark Zuckerberg, CEO of Meta Platforms
Mary Meeker, venture capitalist
Steve Jobs, co-founder and former CEO and chairman of Apple
Steve Wozniak, American entrepreneur and electrical engineer
Donald Trump, 47th president of the United States of America
Rob Hof, editor-in-chief at SiliconANGLE Media
Stephen K. Benjamin, former senior advisor to the President of the United States
Elon Musk, CEO of Tesla
Kara Swisher, journalist
Jackie McGuire, principal analyst at theCUBE Research
Ralph Nader, American activist
George Carlin, late comedian
Steve Ballmer, former CEO and president of Microsoft
George Conrades, former SVP at IBM
Lina Khan, former chair of the Federal Trade Commission
Brian J. Baumann, director of Capital Markets at NYSE
John Mack, founder at Life Calling
Ronald Reagan, 40th U.S. president
Julie Choi, SVP and CMO of Cerebras Systems
Jeff Bezos, chairman of Amazon
Jalen Hurts, NFL quarterback
Saquon Barkley, NFL running back
Paul Martino, managing partner at Bullpen Capital
Patrick Mahomes, NFL quarterback
Andy Reid, NFL coach
Wes Welker, NFL coach

Here’s the full theCUBE Pod episode:

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Photo: SiliconANGLE