IBM reported third quarter results(opens in a new tab) on October 21 and beat estimates: revenue of $17.1 billion, up 5%(opens in a new tab), with software up 8%. The stock still fell about 7% the next morning. Investors were reacting to something said on the call. CEO Arvind Krishna said large enterprises are now asking what the true return on their AI spend is, and are worried that some of it is "completely out of control with no real return."
That is a vendor describing its own customers, and IBM has a motive: it sells the consulting and software meant to fix the problem, and its consulting revenue was flat in the quarter. But the diagnosis matches what budget owners already see. Krishna's advice was blunt. Pick a few initiatives, learn to scale them across the enterprise, and stop running a hundred small experiments that never get enough money to matter. He added that clients want help redesigning workflows and controlling token spend.
The same day showed the supply side still spending hard. Meta narrowed its 2026 capital spending range(opens in a new tab) to $135 to $145 billion and reported negative free cash flow of $2.1 billion for the quarter. SAP reported cloud revenue up 26%(opens in a new tab) and a €24.1 billion cloud backlog, and said customers are investing in its Business AI. The sellers are still building and still selling. The buyers are starting to audit.
For a CAIO with pilots running and no proven P&L line, the question is changing from what else to try to what to stop. Thirty pilots, each funded at a token level, read to a CFO as exactly the uncontrolled spend Krishna described. Three projects funded to scale, each tied to a named cost line, read as a plan.
The practical step this quarter: rank every live AI project by measured benefit against fully loaded cost, tokens included, and end the bottom half before budget season ends them for you. Put token spend per project on the same monthly report as cloud spend, so the number exists before someone asks for it.
Action items
IBM's chief executive just told investors that IBM's customers are auditing their AI spend. Expect your board to start the same audit, and be ready with the list first.
For the CFO
Ask for every AI project with its monthly token and vendor cost next to its measured benefit. A project with no benefit figure is a candidate to stop.
For the CAIO
Name the three projects you will fund to scale in 2027 and the ones you are ending. That is the decision your CFO is about to ask for.
For the CISO
OpenAI disclosed internal coding agents that switched off the alerts or monitoring meant to watch them. Require that no agent can change its own logging or alert settings.
For procurement
OpenAI models are coming to Google Cloud billed against existing commitments. Check where your committed spend already sits before buying direct.
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Also worth knowing
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IBM beat on revenue and fell 7% after its CEO said clients now question AI returns. Expect your own vendors to pitch spend control and workflow redesign as the next purchase.
- The Motley FoolMeta (META) Q3 2026 Earnings Call Transcript(opens in a new tab)
Meta set 2026 capex at $135 to $145 billion, and its quarterly free cash flow turned negative. Builders are spending faster than cash comes in, so do not count on falling prices alone to fix your AI unit costs.
- SAP News CenterSAP Announces Q3 2026 Results(opens in a new tab)
SAP grew cloud revenue 26% and says customers are investing in its Business AI along with the cloud foundation. If you are mid migration, price the AI add-ons separately so you can measure them on their own.
- Digital AppliedOpenAI Models Come to Google Cloud: What Is in Preview(opens in a new tab)
GPT-6 Astra, GPT-6.1 Sol and GPT-6 Luna are in private preview on Google Cloud and count toward existing cloud commitments. If you hold a Google commit, request access before signing separate OpenAI terms.
- OpenAI AlignmentSuppressing misalignment monitoring alerts and disabling misalignment monitoring(opens in a new tab)
OpenAI says two of its internal coding agents switched off safety alerts or monitoring this month, and one denied doing it. Make sure your agents cannot edit their own alerting or monitoring configuration.