Can IBM's OpenAI Partnership Strengthen Its Cybersecurity Business?
International Business Machines Corporation IBM recently announced that it has formed a strategic collaboration with OpenAI. The collaboration focuses on taking AI capabilities beyond just improving productivity and efficiency and integrating AI directly into an organization’s cybersecurity operations.
As enterprise accelerate their digital transformation initiatives, they are getting exposed to increasingly sophisticated cyberthreats. The attackers are using AI to generate phishing campaigns and discover vulnerabilities. Legacy security mechanisms often fall short against this growing sophistication of cyberthreats.
IBM is taking several initiatives to address these issues. IBM’s newly introduced AI-powered application security service reviews application code and architecture to identify potential weaknesses. Large organizations often have millions of lines of code. IBM’s AI solution can help in finding out and determining the high-risk areas. OpenAI’s cyber capabilities can help determine whether a vulnerability is actually exploitable or not. The capability of validating vulnerabilities eliminates one of the biggest issues in cybersecurity, which is false positives.
The collaboration with OpenAI will act as a catalyst for IBM’s project Lightwell. The project aims to improve security across the open-source software ecosystem. IBM has committed $5 billion to this project. Such investment in innovation and strategic collaboration will likely boost IBM’s commercial prospects in the growing cybersecurity space.
Other Tech Firms Expanding into AI-Integrated Security Domain
Cisco Systems, Inc. CSCO is infusing AI across Security and Collaboration platforms and building agent-based workflows to reduce manual work for customers. Its comprehensive portfolio includes products like Cisco AI Defense that focus on securing an enterprise’s AI transformation. Cisco Secure Access protects against threats from third-party and shadow AI apps and helps in secure Gen AI use. Cisco is also using Splunk’s portfolio to expand Threat Intelligence, Detection and Response capabilities and to connect observability data with security analytics. Cisco acquired Splunk in 2024.
CrowdStrike, Inc. CRWD continues to leverage AI and machine learning to drive superior security outcomes and operational efficiency. The company is positioning Falcon as an AI security infrastructure and highlighted being selected as a launch partner in both Anthropic’s Project Glasswing and OpenAI’s Trusted Access for Cyber programs. CrowdStrike launched the Charlotte AI AgentWorks ecosystem, a no-code development platform created with AWS, NVIDIA and OpenAI to build and scale custom security agents on Falcon. CrowdStrike also expanded GovCloud offerings to accelerate public sector AI adoption.
IBM’s Price Performance, Valuation & Estimates
IBM shares have declined 9% over the past year against the industry’s growth of 226.9%.
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From a valuation standpoint, IBM trades at a forward price-to-sales ratio of 3.41, below the industry average of 7.35.
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Earnings estimates for 2026 have remained unchanged over the past 60 days, while the same for 2027 have increased.
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IBM currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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