IBM CEO says open weight models are now irresistibly good and cheap on-prem

IBM CEO Arvind Krishna stated that open weight models have become a cost-effective option for on-prem enterprise use, offering 90% of the performance at 10% of the cost of closed frontier models, which is a significant improvement from 2025. This has led to increased interest in on-prem AI infrastructure, but many businesses may struggle to implement it due to the need for specialized expertise. IBM is now seeing booming interest in on-prem AI infrastructure, and the company believes that most businesses can build useful AI infrastructure in just two or three racks.