What's Happening?
IBM has signed a $240 million deal with Together AI to provide dedicated AI computing capacity on IBM Cloud using NVIDIA systems. Together AI, a neocloud provider, plans to use IBM's infrastructure to support its open-source AI model inference business.
The agreement positions IBM as a major cloud tenant, offering exposure to AI infrastructure demand beyond its traditional enterprise software and consulting customers. Together AI processes approximately 400 trillion tokens monthly, highlighting the scale of operations supported by this deal.
Why It's Important?
The deal marks IBM's strategic entry into the neocloud market, a sector focused on GPU infrastructure and AI services. By partnering with Together AI, IBM gains access to a rapidly growing segment, potentially boosting its cloud growth and expanding its customer base. The collaboration also strengthens IBM's relationship with NVIDIA, enhancing its technological capabilities and market competitiveness. For Together AI, the deal provides the necessary infrastructure to scale its operations and meet increasing demand for AI services.
What's Next?
The AI inference cluster is expected to be operational by the first quarter of 2027, supporting Together AI's business model. IBM's partnership with NVIDIA includes plans to integrate NVIDIA's data and inference tools into IBM's Red Hat AI Factory stack, potentially leading to further innovations and collaborations. The deal could pave the way for IBM to explore additional opportunities in the neocloud market, expanding its influence in the AI sector.
