Mohamad Ali of IBM, senior vice president and head of consulting, joins theCUBE Research at Think 2026 to outline IBM Consulting’s approach to applying artificial intelligence across client engagements. Ali draws on engineering and consulting experience and they present customer proof points from Providence Health, Aramco and AWS collaborations, explain watsonx and hybrid AI stacks, and describe IBM Consulting Advantage and Pearson Advantage for managing large-scale agent deployments. John Furrier of theCUBE and Dave Vellante of theCUBE guide the conversation.
Ali emphasizes that organizations must manage digital workers in the same manner as human employees by establishing a hire-to-retire lifecycle, observability and a hybrid management layer that supports multiple AI stacks. They underscore credentialing and quality gates for agents through Pearson Advantage, the role of chief human resources officers in workforce integration, and the use of AI-driven productivity gains to reinvest in engineering and revenue-generating business models. These points receive reinforcement from John Furrier of theCUBE and Dave Vellante of theCUBE.
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Mohamad Ali, IBM Consulting
Mohamad Ali of IBM, senior vice president and head of consulting, joins theCUBE Research at Think 2026 to outline IBM Consulting’s approach to applying artificial intelligence across client engagements. Ali draws on engineering and consulting experience and they present customer proof points from Providence Health, Aramco and AWS collaborations, explain watsonx and hybrid AI stacks, and describe IBM Consulting Advantage and Pearson Advantage for managing large-scale agent deployments. John Furrier of theCUBE and Dave Vellante of theCUBE guide the conversation.
Ali emphasizes that organizations must manage digital workers in the same manner as human employees by establishing a hire-to-retire lifecycle, observability and a hybrid management layer that supports multiple AI stacks. They underscore credentialing and quality gates for agents through Pearson Advantage, the role of chief human resources officers in workforce integration, and the use of AI-driven productivity gains to reinvest in engineering and revenue-generating business models. These points receive reinforcement from John Furrier of theCUBE and Dave Vellante of theCUBE.
>> Hello, I'm John Furrier with theCUBE with Dave Vellante, my co-host, co-founder, SiliconANGLE Media and theCUBE. We are here at theCUBE Studios and IBM's studio at Think 2026. Mohamad Ali is back on theCUBE. Fresh off the keynote, Senior Vice President, head of IBM, consultant with a lot of success stories. And again, a lot of momentum. This market is all about transformation. The transformation edge is happening and it's a competitive edge and it's a company transformation story. Mohamad, great to see you.
Mohamad Ali
>> Great to be here.
John Furrier
>> It's a good time to be an engineer and a consulting leader at IBM these days.
Mohamad Ali
>> I love being an engineer.
John Furrier
>> Talk about the success stories because normally when you have customer success stories, it's like, okay, look, it's a best practice. The IT projects are turning into business model transformation.
Mohamad Ali
>> Absolutely.
John Furrier
>> You shared three great examples, all different scenarios on stage. Take us through the thought process of the presentation.
Mohamad Ali
>> Yeah. I mean, what we wanted to do was show the whole arc. So two years ago, I met Carol right here at Think, and she said, "Hey, one of the biggest problems I've got, I've got 51 hospitals, 120,000 employees and I'm struggling to hire nurses, et cetera." You guys know in the American healthcare system, nurses are one of the hardest things to hire. And she said, "How can I use AI to do this better?" And we said, "I think we could figure this out." And so we combined, we built a bunch of AI agents using watsonx connected to Oracle and we worked with her to deploy this. Two years later, she's a star of the company because if you think about it, she is recruiting nurses 12 days faster. That's saving lives. And now everybody else at Providence wants to model what she's doing. It's an amazing success story, but it's because we started this project two years ago and within IBM Consulting, we started this approach three years ago, bearing fruit. Then it was great to have Greg Pearson from AWS with us because he's been such an incredible partner. He's global head of sales for all of AWS, really impressive guy. And he talks about what we're doing at Fortitude and this is insurance claims. Now we're going from weeks to be able to respond in days for critical insurance matters. And then we wrapped it up with, okay, we have these 4,000 agents running on IBM Consulting Advantage. How do we make sure that they are great agents? They're running on AWS infrastructure, in some cases on GovCloud, secure infrastructure, but you want it to be high quality. So I mean, I love this, right? Dave Pearson. And Dave and I actually had this idea on a ski slope.
Dave Vellante
>> That's a great story.
John Furrier
>> Where were you skiing, by the way? I want to know.
Mohamad Ali
>> It was four months ago we had this idea. And Dave said, "Listen, there's a whole different way to credentialize digital workers. You can't just have them pass the test because they can memorize it." There's a whole different way we've been thinking about it. We want to implement it. And so at IBM, we have 150,000 consultants and we give them badges when they have skills. They say, "Why can't we give the same badges or similar badges to the digital workers like a cloud architect?" And that's what he's done. And so we've actually helped him build his version of Consulting Advantage called Pearson Advantage. And in that we've helped him build a bunch of custom agents to do the credentializing. So now you could give these agents a cloud essentials badge, a security badge, a IBM business conduct guidelines badge, and that's what we're doing. I mean, it's like the whole value chain. Super exciting.
John Furrier
>> I mean, Arvind on stage on the main keynote, his theme was closing the gap. Billions are being spent. Last time you were on theCUBE two years ago, you said we're going to have a consulting organization that's going to have great service with a lot of technology leverage. Dave pointed that out multiple times after.
Dave Vellante
>> .
John Furrier
>> Very key ... We love that strategy. It's playing out with proof points.
Mohamad Ali
>> Yes.
John Furrier
>> Share some of the consulting gaps you're closing. Those are three other ones. What other things have you done as client zero and how's that replicated into the field?
Mohamad Ali
>> Well, I mean, if you just look at the IBM Consulting business, right? From 2024 to 2025, we continue to grow, but our profits expand at 20%. We're getting much, much more efficient. We're actually delivering more value to the client and getting more value to us. Now you guys know this consulting business is a complicated business. We have a business that's growing extraordinarily well, that is technology heavy, gen AI heavy. And then you have another business where there's a bunch of renewals on old contracts, a hundred million dollar contract. Client says, "Hey, now I want to renew it for $70 million." So there's pressure in that business. But when you look at the two businesses, we are using AI on ourselves to make the whole business more successful. And then if you look at the gen AI part of the business in particular, that thing's on fire and that is driven by all this client zero approach that we're putting into it.
Dave Vellante
>> So one of the companies that IBM put forth on day one was Aramco as part of an AI first company. And I was thinking, you showed a number of proof points today with customers. I was thinking at the time, I bet you Mohamad's team had their hand in that deal too because I know you guys do a lot in the Middle East. First of all, is that true and what exactly are you doing with Aramco? I'd love to learn more about that.
Mohamad Ali
>> Yeah. So I mean, Aramco is actually a very technologically advanced company and they are doing a lot themselves and we get the opportunity to work with them to supercharge what they're doing. A lot of companies don't build their own LLMs. At Aramco, they built their own LLM and I think it's called like DeepBrain or something. They have a great name for it. But then how do you deploy AI to solve really complicated problems? And so they have some problems that nobody in the world really has at that scale, like pipelines all over the place, quality of the pipelines, the corrosion predictions of these pipelines. So they have some fascinating problems that we have the opportunity to work with them to solve. I mean, it's almost like that quantum success that you saw where they now can model 12,000 proteins, but a company like IBM can pull that off. And so at Aramco, look, the stuff we're doing with Providence Health is great, being able to recruit people faster. But some of the problems that Aramco has in terms of that I just described in these pipelines and so forth, the math and the sophistication of being able to solve those problems at another tier. So what we get to do is we get to work with them on these super hard problems and as we work on the super hard problems, we can apply them to all kinds of other cases.
Dave Vellante
>> And we're seeing the entire region, obviously it's oil rich region with a lot of wealth there, they're leaning hard into AI at technology-
Mohamad Ali
>> Very hard.
Dave Vellante
>> A technology first company like Aramco, you can see they think long-term, you can see them rethinking their business, what business are we in? I'm envisioning potentially down the road interesting spinouts that are maybe better valuation multiples than perhaps energy is. And so I think partnering with IBM brings really interesting opportunities for value creation.
Mohamad Ali
>> Yeah, I mean they're really forward-thinking about this, because they're sitting on a set of problems associated with, let's say pipelines. I gave that example, but that pipeline problems applicable to water supply, all kinds of other things. So they have the data to try to solve this now with AI. We get to do it with them. Now as they solve these problems with AI, there are entire businesses that can be created to apply these new solutions, not only to the oil and gas industry, but the water distribution industry, anything that has a pipeline for example. And that's just one business that can come out of it. So I'm super excited about that.
John Furrier
>> Yeah. The thing that's resonating right now, obviously the agentic on stage, Amazon, and you guys were talking about the native runtime of agents in bedrock and agent force. So the agent workforce, you're used to managing people.
Mohamad Ali
>> Yes.
John Furrier
>> Now you have to manage people and digital workers.
Mohamad Ali
>> That's right.
John Furrier
>> Talk about how that's changed now that you're starting to see evidence of agents with the methodology that you guys have working. And then second part of the question is, how has that changed the customer's mindset around thinking bigger around problems? That was another thing that was on the keynote, think bigger. Talk about the agent workers. How are they being managed? If you're getting certified, there's got to be some reviews. Take us through as a leader, you're looking at now workforces that are diverse, humans and agents workers.
Mohamad Ali
>> So you guys know, right, I've been in software business for about 30 years and I'm not really a consultant. So when Arvind called me and we had a conversation about three years ago and he said, "I want you to come over and I want you to be a consulting business." And I said to them, "Hey, you realize I'm not a consultant." He goes, "You don't understand." And his idea was that, look, all labor businesses are going to become a combination of human labor and digital labor. And what is digital labor? It's a whole bunch of bits of software. And so I need you to come in and I need you to build it, you build this set of software and do it in a way that it could be managed. And you could think of this as HR management, HR management of people, but now you have to HR manage human workers and digital workers. How are you going to do that? And so in IBM Consulting, we have 3000 projects going at any time and every one of those teams want to use their own approach to AI. So I had to give them flexibility. You want to use watsonx, fine. You want to use Anthropic, fine. You want to use the open AI stack, fine, right? So go build this stuff, but I needed to create a management layer, almost like an HR management layer for what's being built. And then I said, "You build the digital workers on top of this layer, consume whatever you want below the layer, everything runs through here and you can use any AI stack." So it's really a truly hybrid AI. And this way, now I can manage the 4,000 digital workers, everything including hire to retire the digital worker. And so now I'm managing that. And then the next question I had, and so I deployed on AWS GovCloud into other instances, et cetera. Now I could use it to do all these projects. And I have 450 projects that I am doing like this. And so then you say, "Well, now I want to make sure these digital workers are really good." So now, just the same way, Dave, if you were an engineer, you probably have a badge that said you were credentialized on this skill or this Python capability or this C++ capability. And we have that in our HR system that we have these badges. I have these badges, right? You are an IBM employee, you'd have the badges too. Now we're using that same HR system from Pearson called Credly to give the digital workers badges. So if you have a cloud architect, which we can add it to a team to do a project, that cloud architect could have a cloud essentials badge. It could have a security badge, it could have an IBM business conduct guidelines badge so you know that thing is going to follow the ethical and legal guidance of IBM. It's like a whole different-
John Furrier
>> That Pearson example is a good one because you're verifying agents.
Mohamad Ali
>> Yeah. Verifying.
John Furrier
>> I mean, that is new.
Mohamad Ali
>> Yes. It's brand new.
John Furrier
>> Brand new.
Dave Vellante
>> I want to put a finer point on that because Dave Treat said agents versus human skills are different. One is the agents are workflow centric, not knowledge centric. And so you have to figure out, okay, what tools do they have access to? Give them instructions and context. What context do they have? Can the agent supply the right skill to all these new criteria that you have to go through to earn the gates that you have to go through to earn those badges.
Mohamad Ali
>> Right. You can't just give the agent the textbook, it'll just memorize them, get all the answers right. So what Dave is doing is a much more sophisticated way. So it's giving the agent problems, workflow problems it's never seen before and he doesn't have to grade it on multiple choice because he's got an agent grading an agent. So you can actually have our agent do a complex workflow thing and another agent grade how it did that in that workflow, a workflow that it's never seen before. And so you're absolutely right. The way you credentialize the digital worker is actually quite different than how you credentialize .
Dave Vellante
>> How about AI for revenue generation? I was talking to a good friend, Jamie Thomas last night came up at the analyst evening event and she's now running the maintenance organization. And I was asking her, "Where's the value?" Because she's using AI. She said, "It's not so much the cost savings, it's the revenue generation because we were missing a lot of opportunities. And so we've kicked in our digital marketing. We didn't necessarily have the go to market bandwidth or the sales team's attentions. So we've been using digital and it's really, we're a top line producer." So what are you seeing in terms of revenue generation and those types of value creation activities within the client base?
Mohamad Ali
>> I mean, I feel like we're in the third phase now of getting value out. First was everybody go buy licenses and give it to all the employees, thousands of licenses, see what happens. And that didn't work. Then people stepped back and said, "Hey, let's re-engineer the workflows," which is actually really hard, "and then apply the AI to it." Which is the approach we started taking three years ago, even to our own company and that's working. So we took a $25 billion spend and we've actually taken that four and a half billion of that spend. I mean, that's amazing. And that only happened because we decomposed our company into these 490 workflows, took 70 of them, re-engineered them, did it the hard way. That is working at companies now and they're getting productivity. So then the next thing, and this is happening right now, is they're starting to do two things to use the benefits there to drive growth. One is they're taking part of that savings and reinvesting it in engineering and sales and so forth. And that's what Rob Thomas is doing with the IBM products. He's reinvesting that in engineering for new products, in sales and you can see the revenue is going up. The other thing that they're doing is they're realizing that there's certain business models that they can have with AI that they didn't have before. So we have this one client where he realizes that he's selling all these components and he's got a catalog and his competitors have a catalog, et cetera. He can now mine all that catalog and figure out when there's a rarity on a part and he only has that part and then you can charge a premium for it. So he's driving revenue acceleration. And actually the person who came up with this was the CEO of the company. And so now they're doing it and it's working and they're getting ... And that couldn't have happened without AI. New business models.
John Furrier
>> Yeah. And the revenue's coming in faster. So the cycles of proof points of the value is coming in faster. I mean, one of the things I'm learning from Think this year is one of my main takeaways and really was inspired by my interview with Jim Kavanaugh a couple of months ago was the culture piece. You talked about on stage, you had multiple of your customers represented, Rob had some of his technology customers, but it was also the CHRO was on stage, chief human resource officer. So you mentioned it twice. You said HR twice in this interview.
Mohamad Ali
>> Yes.
John Furrier
>> But I don't think ... That's the first probably in the queue, but it speaks to the C-suite collaboration because now it's not silo lanes, stay in your lane. They're integrated because there's a human resources components to not only the agents, which has application, but the people who are driving them. Upskilling, re-skilling, reorging. I mean, you're probably going to have multiple re-orgs with your agent. "Okay, move from this project to the next." So it's a lot of organizational behavior theory in practice.
Mohamad Ali
>> Yes.
John Furrier
>> What is your opinion on the culture of this HR movement?
Mohamad Ali
>> I think the CHRO becomes a very, very important person going forward. I mean, you could see that our own company, Nicola's involved in all kinds of things that a typical HR leader would not be involved in. I mean, I'm working with her on technology, like how do we build AI agents to do certain things, right? But there's obviously the rebalancing of the workforce, then that's going to be a complicated thing that HR leaders have to manage between human and digital workers. But also the human workers, there's a whole different skillset that you need there. I mean, if you think about it, a traditional manager will manage a human being, right? But tomorrow, or actually today, that manager has to learn how to manage a human being as well as a digital worker. They have to figure out how to put the digital worker into a team, how to make sure that they understand the limitations of digital worker. How do you make sure this digital worker's going to interact well with these human workers, right? How do you do that? Us as managers did not grow up doing that.
Dave Vellante
>> How do you do that? You've got more digital agents working for .
John Furrier
>> He's got a dashboard. He told me about his dashboard.
Mohamad Ali
>> Yeah, because I have a dashboard. I use that, but I also, I actually have to come up to speed on how these digital workers work. So once a week, I have a reverse mentor. His name is Wade. He comes into my office and I learn how to program these digital workers using Python from scratch. I'm not using some tool to do it. I'm doing it from scratch because if I don't understand how they work internally, how you, Dave, work internally, I can't manage you.
John Furrier
>> Explain what a reverse mentor is because I love .
Dave Vellante
>> Yeah, I love that term.
Mohamad Ali
>> This is like a junior engineer, 25 year old who's really good at what he does or anybody, right? A lower level employee who comes and spends time with me where I'm learning from him or her, right? Typical mentoring is the other direction. Somebody senior working with somebody junior. Here, every week, I'm learning. I'm learning how to code and the reason I want to learn how to code is I want to learn how to manage and motivate these digital workers. And when I say motivate, that word came to me after I realized that the digital workers could do different things in different scenario and I want to motivate them to do the right things. I want to put the guardrails, I want to put the incentives so they have to do the right things. How many managers are going to figure out how to transition to become a manager?
Dave Vellante
>> And you're doing this in Python. You're not vibe coding this or you are a little bit?
Mohamad Ali
>> So I was vibe coding, I was doing all that stuff and then the agents would get built and I didn't know how they were getting built. And so I still do the vibe coding, but I said to Wade, "Wade, what we're going to do is we're going to start from scratch. We're going to start with Python." And in this case, an OpenAI, a key. And I went and I logged and I got my $5 key from OpenAI and then we started building stuff. And as we started building stuff, I actually saw the structure of the code and that gave me a sense as to how these digital workers are going to behave, how we're nesting the agents, how we're creating supervisory agents and agents that participate. How we're putting guardrails around them, how we're calling agents to do things the way we used to call functions before. I mean, in the old days, if you wanted to look up the weather, you would actually have a database and you have a function call for that database. Today you call an LLM to do that. And when it comes back, you have to put scaffolding around to check it. So I wanted to learn how to do all of that and then I could go back to vibe coding and then I would understand what the vibe code is doing, but now I understand how to motivate .
John Furrier
>> You're a Senior Vice President, head of consulting. Okay? I love this because we saw shadow IT. IT guy goes around his boss, go puts his credit card down, goes to Amazon, builds a prototype, gets his hands slapped and gets promoted. How has shadow AI changed? Because you're essentially shadow AI right there. I mean, I guess you're the boss, but we're seeing away with it. We're seeing instances where executives, because ...
Mohamad Ali
>> Are building things.
John Furrier
>> They've been engineers in their earlier lives. They know how to code, but they don't know the syntax .
Mohamad Ali
>> So this is a great question, right? Because we had this problem and we came up with a way to address it. So I'm actually encouraging all of my executives, I had a hundred of the top executives and I basically said, "Unless you guys can do this, unless you could write your own digital workers, you will never learn how to manage these digital workers and you're not going to have a future." And the people who can, and there's a guy who runs Canada for us, he does this. He knows how to manage digital workers and his profitability has now risen to the third-highest country at all of IBM because he knows how to use digital workers, deploy them, manage them.
John Furrier
>> You think that's why? You really do have that evidence .
Mohamad Ali
>> I know that because every week he sends me a note as to what he's doing.
John Furrier
>> his agent. Mohamad wakes up at 7:00, send him email. We know he's online. We see his green dot.
Mohamad Ali
>> But to your shadow IT thing, if people are building agents, I want to know they exist, right? And so that's why I gave them complete freedom to build whatever agent they want on whatever AI platform they want, but it all has to run through this common layer. And so now I actually have visibility, observability across all the AI everywhere. And so no matter who builds an AI someplace, we will see it. And this allows us to do that, the hire to retire. So if you build an agent that nobody's using, eventually we're going to decommission it. We're going to starve it, it's not going to get tokens, right? So it's going to retire.
Dave Vellante
>> So you don't give them a token budget?
Mohamad Ali
>> Right. So it's going to retire. So people can use whatever tokens they want today.
Dave Vellante
>> So do they have a token budget or they can ...
Mohamad Ali
>> They can do whatever-
Dave Vellante
>> Unlimited.
Mohamad Ali
>> Right now it's unlimited.
Dave Vellante
>> Okay. Let chaos rein and then reign the chaos in.
Mohamad Ali
>> That's right. And then you have-
John Furrier
>> Blank check on tokens.
Mohamad Ali
>> And then you have to have this hire to retire concept of the digital workers, right? So the hire is that you could go hire whatever you want, you could use whatever your token, right? But if it's not useful, it's not productive to the company and we can see that, then you turn off the token fee to it. You retire it. And so we're going to learn a lot of things .
John Furrier
>> Shadow AI is a feature, not a bug because what you want to do, that's the future of work. You just got to do all the work. We'll have a great masterclass here and of course congratulations on all the momentum and success. We look forward to doing deep dives on all these things.
Dave Vellante
>> Yeah, many more questions. we'd love to have you back.
John Furrier
>> Yeah. We're getting the hook here. Mohamad Ali, Senior Vice President, head of IBM consultant. Again, AI is impacting every part of the organization, it's changing how the workflows are going to be built and run and invested in. This is theCUBE, doing our part. Bringing you the data soon will be agents. I'm John Furrier with Dave Vellante. Thanks for watching.
>> Hello, I'm John Furrier with theCUBE with Dave Vellante, my co-host, co-founder, SiliconANGLE Media and theCUBE. We are here at theCUBE Studios and IBM's studio at Think 2026. Mohamad Ali is back on theCUBE. Fresh off the keynote, Senior Vice President, head of IBM, consultant with a lot of success stories. And again, a lot of momentum. This market is all about transformation. The transformation edge is happening and it's a competitive edge and it's a company transformation story. Mohamad, great to see you.
Mohamad Ali
>> Great to be here.
John Furrier
>> It's a good time to be an engineer and a consulting leader at IBM these days.
Mohamad Ali
>> I love being an engineer.
John Furrier
>> Talk about the success stories because normally when you have customer success stories, it's like, okay, look, it's a best practice. The IT projects are turning into business model transformation.
Mohamad Ali
>> Absolutely.
John Furrier
>> You shared three great examples, all different scenarios on stage. Take us through the thought process of the presentation.
Mohamad Ali
>> Yeah. I mean, what we wanted to do was show the whole arc. So two years ago, I met Carol right here at Think, and she said, "Hey, one of the biggest problems I've got, I've got 51 hospitals, 120,000 employees and I'm struggling to hire nurses, et cetera." You guys know in the American healthcare system, nurses are one of the hardest things to hire. And she said, "How can I use AI to do this better?" And we said, "I think we could figure this out." And so we combined, we built a bunch of AI agents using watsonx connected to Oracle and we worked with her to deploy this. Two years later, she's a star of the company because if you think about it, she is recruiting nurses 12 days faster. That's saving lives. And now everybody else at Providence wants to model what she's doing. It's an amazing success story, but it's because we started this project two years ago and within IBM Consulting, we started this approach three years ago, bearing fruit. Then it was great to have Greg Pearson from AWS with us because he's been such an incredible partner. He's global head of sales for all of AWS, really impressive guy. And he talks about what we're doing at Fortitude and this is insurance claims. Now we're going from weeks to be able to respond in days for critical insurance matters. And then we wrapped it up with, okay, we have these 4,000 agents running on IBM Consulting Advantage. How do we make sure that they are great agents? They're running on AWS infrastructure, in some cases on GovCloud, secure infrastructure, but you want it to be high quality. So I mean, I love this, right? Dave Pearson. And Dave and I actually had this idea on a ski slope.
Dave Vellante
>> That's a great story.
John Furrier
>> Where were you skiing, by the way? I want to know.
Mohamad Ali
>> It was four months ago we had this idea. And Dave said, "Listen, there's a whole different way to credentialize digital workers. You can't just have them pass the test because they can memorize it." There's a whole different way we've been thinking about it. We want to implement it. And so at IBM, we have 150,000 consultants and we give them badges when they have skills. They say, "Why can't we give the same badges or similar badges to the digital workers like a cloud architect?" And that's what he's done. And so we've actually helped him build his version of Consulting Advantage called Pearson Advantage. And in that we've helped him build a bunch of custom agents to do the credentializing. So now you could give these agents a cloud essentials badge, a security badge, a IBM business conduct guidelines badge, and that's what we're doing. I mean, it's like the whole value chain. Super exciting.
John Furrier
>> I mean, Arvind on stage on the main keynote, his theme was closing the gap. Billions are being spent. Last time you were on theCUBE two years ago, you said we're going to have a consulting organization that's going to have great service with a lot of technology leverage. Dave pointed that out multiple times after.
Dave Vellante
>> .
John Furrier
>> Very key ... We love that strategy. It's playing out with proof points.
Mohamad Ali
>> Yes.
John Furrier
>> Share some of the consulting gaps you're closing. Those are three other ones. What other things have you done as client zero and how's that replicated into the field?
Mohamad Ali
>> Well, I mean, if you just look at the IBM Consulting business, right? From 2024 to 2025, we continue to grow, but our profits expand at 20%. We're getting much, much more efficient. We're actually delivering more value to the client and getting more value to us. Now you guys know this consulting business is a complicated business. We have a business that's growing extraordinarily well, that is technology heavy, gen AI heavy. And then you have another business where there's a bunch of renewals on old contracts, a hundred million dollar contract. Client says, "Hey, now I want to renew it for $70 million." So there's pressure in that business. But when you look at the two businesses, we are using AI on ourselves to make the whole business more successful. And then if you look at the gen AI part of the business in particular, that thing's on fire and that is driven by all this client zero approach that we're putting into it.
Dave Vellante
>> So one of the companies that IBM put forth on day one was Aramco as part of an AI first company. And I was thinking, you showed a number of proof points today with customers. I was thinking at the time, I bet you Mohamad's team had their hand in that deal too because I know you guys do a lot in the Middle East. First of all, is that true and what exactly are you doing with Aramco? I'd love to learn more about that.
Mohamad Ali
>> Yeah. So I mean, Aramco is actually a very technologically advanced company and they are doing a lot themselves and we get the opportunity to work with them to supercharge what they're doing. A lot of companies don't build their own LLMs. At Aramco, they built their own LLM and I think it's called like DeepBrain or something. They have a great name for it. But then how do you deploy AI to solve really complicated problems? And so they have some problems that nobody in the world really has at that scale, like pipelines all over the place, quality of the pipelines, the corrosion predictions of these pipelines. So they have some fascinating problems that we have the opportunity to work with them to solve. I mean, it's almost like that quantum success that you saw where they now can model 12,000 proteins, but a company like IBM can pull that off. And so at Aramco, look, the stuff we're doing with Providence Health is great, being able to recruit people faster. But some of the problems that Aramco has in terms of that I just described in these pipelines and so forth, the math and the sophistication of being able to solve those problems at another tier. So what we get to do is we get to work with them on these super hard problems and as we work on the super hard problems, we can apply them to all kinds of other cases.
Dave Vellante
>> And we're seeing the entire region, obviously it's oil rich region with a lot of wealth there, they're leaning hard into AI at technology-
Mohamad Ali
>> Very hard.
Dave Vellante
>> A technology first company like Aramco, you can see they think long-term, you can see them rethinking their business, what business are we in? I'm envisioning potentially down the road interesting spinouts that are maybe better valuation multiples than perhaps energy is. And so I think partnering with IBM brings really interesting opportunities for value creation.
Mohamad Ali
>> Yeah, I mean they're really forward-thinking about this, because they're sitting on a set of problems associated with, let's say pipelines. I gave that example, but that pipeline problems applicable to water supply, all kinds of other things. So they have the data to try to solve this now with AI. We get to do it with them. Now as they solve these problems with AI, there are entire businesses that can be created to apply these new solutions, not only to the oil and gas industry, but the water distribution industry, anything that has a pipeline for example. And that's just one business that can come out of it. So I'm super excited about that.
John Furrier
>> Yeah. The thing that's resonating right now, obviously the agentic on stage, Amazon, and you guys were talking about the native runtime of agents in bedrock and agent force. So the agent workforce, you're used to managing people.
Mohamad Ali
>> Yes.
John Furrier
>> Now you have to manage people and digital workers.
Mohamad Ali
>> That's right.
John Furrier
>> Talk about how that's changed now that you're starting to see evidence of agents with the methodology that you guys have working. And then second part of the question is, how has that changed the customer's mindset around thinking bigger around problems? That was another thing that was on the keynote, think bigger. Talk about the agent workers. How are they being managed? If you're getting certified, there's got to be some reviews. Take us through as a leader, you're looking at now workforces that are diverse, humans and agents workers.
Mohamad Ali
>> So you guys know, right, I've been in software business for about 30 years and I'm not really a consultant. So when Arvind called me and we had a conversation about three years ago and he said, "I want you to come over and I want you to be a consulting business." And I said to them, "Hey, you realize I'm not a consultant." He goes, "You don't understand." And his idea was that, look, all labor businesses are going to become a combination of human labor and digital labor. And what is digital labor? It's a whole bunch of bits of software. And so I need you to come in and I need you to build it, you build this set of software and do it in a way that it could be managed. And you could think of this as HR management, HR management of people, but now you have to HR manage human workers and digital workers. How are you going to do that? And so in IBM Consulting, we have 3000 projects going at any time and every one of those teams want to use their own approach to AI. So I had to give them flexibility. You want to use watsonx, fine. You want to use Anthropic, fine. You want to use the open AI stack, fine, right? So go build this stuff, but I needed to create a management layer, almost like an HR management layer for what's being built. And then I said, "You build the digital workers on top of this layer, consume whatever you want below the layer, everything runs through here and you can use any AI stack." So it's really a truly hybrid AI. And this way, now I can manage the 4,000 digital workers, everything including hire to retire the digital worker. And so now I'm managing that. And then the next question I had, and so I deployed on AWS GovCloud into other instances, et cetera. Now I could use it to do all these projects. And I have 450 projects that I am doing like this. And so then you say, "Well, now I want to make sure these digital workers are really good." So now, just the same way, Dave, if you were an engineer, you probably have a badge that said you were credentialized on this skill or this Python capability or this C++ capability. And we have that in our HR system that we have these badges. I have these badges, right? You are an IBM employee, you'd have the badges too. Now we're using that same HR system from Pearson called Credly to give the digital workers badges. So if you have a cloud architect, which we can add it to a team to do a project, that cloud architect could have a cloud essentials badge. It could have a security badge, it could have an IBM business conduct guidelines badge so you know that thing is going to follow the ethical and legal guidance of IBM. It's like a whole different-
John Furrier
>> That Pearson example is a good one because you're verifying agents.
Mohamad Ali
>> Yeah. Verifying.
John Furrier
>> I mean, that is new.
Mohamad Ali
>> Yes. It's brand new.
John Furrier
>> Brand new.
Dave Vellante
>> I want to put a finer point on that because Dave Treat said agents versus human skills are different. One is the agents are workflow centric, not knowledge centric. And so you have to figure out, okay, what tools do they have access to? Give them instructions and context. What context do they have? Can the agent supply the right skill to all these new criteria that you have to go through to earn the gates that you have to go through to earn those badges.
Mohamad Ali
>> Right. You can't just give the agent the textbook, it'll just memorize them, get all the answers right. So what Dave is doing is a much more sophisticated way. So it's giving the agent problems, workflow problems it's never seen before and he doesn't have to grade it on multiple choice because he's got an agent grading an agent. So you can actually have our agent do a complex workflow thing and another agent grade how it did that in that workflow, a workflow that it's never seen before. And so you're absolutely right. The way you credentialize the digital worker is actually quite different than how you credentialize .
Dave Vellante
>> How about AI for revenue generation? I was talking to a good friend, Jamie Thomas last night came up at the analyst evening event and she's now running the maintenance organization. And I was asking her, "Where's the value?" Because she's using AI. She said, "It's not so much the cost savings, it's the revenue generation because we were missing a lot of opportunities. And so we've kicked in our digital marketing. We didn't necessarily have the go to market bandwidth or the sales team's attentions. So we've been using digital and it's really, we're a top line producer." So what are you seeing in terms of revenue generation and those types of value creation activities within the client base?
Mohamad Ali
>> I mean, I feel like we're in the third phase now of getting value out. First was everybody go buy licenses and give it to all the employees, thousands of licenses, see what happens. And that didn't work. Then people stepped back and said, "Hey, let's re-engineer the workflows," which is actually really hard, "and then apply the AI to it." Which is the approach we started taking three years ago, even to our own company and that's working. So we took a $25 billion spend and we've actually taken that four and a half billion of that spend. I mean, that's amazing. And that only happened because we decomposed our company into these 490 workflows, took 70 of them, re-engineered them, did it the hard way. That is working at companies now and they're getting productivity. So then the next thing, and this is happening right now, is they're starting to do two things to use the benefits there to drive growth. One is they're taking part of that savings and reinvesting it in engineering and sales and so forth. And that's what Rob Thomas is doing with the IBM products. He's reinvesting that in engineering for new products, in sales and you can see the revenue is going up. The other thing that they're doing is they're realizing that there's certain business models that they can have with AI that they didn't have before. So we have this one client where he realizes that he's selling all these components and he's got a catalog and his competitors have a catalog, et cetera. He can now mine all that catalog and figure out when there's a rarity on a part and he only has that part and then you can charge a premium for it. So he's driving revenue acceleration. And actually the person who came up with this was the CEO of the company. And so now they're doing it and it's working and they're getting ... And that couldn't have happened without AI. New business models.
John Furrier
>> Yeah. And the revenue's coming in faster. So the cycles of proof points of the value is coming in faster. I mean, one of the things I'm learning from Think this year is one of my main takeaways and really was inspired by my interview with Jim Kavanaugh a couple of months ago was the culture piece. You talked about on stage, you had multiple of your customers represented, Rob had some of his technology customers, but it was also the CHRO was on stage, chief human resource officer. So you mentioned it twice. You said HR twice in this interview.
Mohamad Ali
>> Yes.
John Furrier
>> But I don't think ... That's the first probably in the queue, but it speaks to the C-suite collaboration because now it's not silo lanes, stay in your lane. They're integrated because there's a human resources components to not only the agents, which has application, but the people who are driving them. Upskilling, re-skilling, reorging. I mean, you're probably going to have multiple re-orgs with your agent. "Okay, move from this project to the next." So it's a lot of organizational behavior theory in practice.
Mohamad Ali
>> Yes.
John Furrier
>> What is your opinion on the culture of this HR movement?
Mohamad Ali
>> I think the CHRO becomes a very, very important person going forward. I mean, you could see that our own company, Nicola's involved in all kinds of things that a typical HR leader would not be involved in. I mean, I'm working with her on technology, like how do we build AI agents to do certain things, right? But there's obviously the rebalancing of the workforce, then that's going to be a complicated thing that HR leaders have to manage between human and digital workers. But also the human workers, there's a whole different skillset that you need there. I mean, if you think about it, a traditional manager will manage a human being, right? But tomorrow, or actually today, that manager has to learn how to manage a human being as well as a digital worker. They have to figure out how to put the digital worker into a team, how to make sure that they understand the limitations of digital worker. How do you make sure this digital worker's going to interact well with these human workers, right? How do you do that? Us as managers did not grow up doing that.
Dave Vellante
>> How do you do that? You've got more digital agents working for .
John Furrier
>> He's got a dashboard. He told me about his dashboard.
Mohamad Ali
>> Yeah, because I have a dashboard. I use that, but I also, I actually have to come up to speed on how these digital workers work. So once a week, I have a reverse mentor. His name is Wade. He comes into my office and I learn how to program these digital workers using Python from scratch. I'm not using some tool to do it. I'm doing it from scratch because if I don't understand how they work internally, how you, Dave, work internally, I can't manage you.
John Furrier
>> Explain what a reverse mentor is because I love .
Dave Vellante
>> Yeah, I love that term.
Mohamad Ali
>> This is like a junior engineer, 25 year old who's really good at what he does or anybody, right? A lower level employee who comes and spends time with me where I'm learning from him or her, right? Typical mentoring is the other direction. Somebody senior working with somebody junior. Here, every week, I'm learning. I'm learning how to code and the reason I want to learn how to code is I want to learn how to manage and motivate these digital workers. And when I say motivate, that word came to me after I realized that the digital workers could do different things in different scenario and I want to motivate them to do the right things. I want to put the guardrails, I want to put the incentives so they have to do the right things. How many managers are going to figure out how to transition to become a manager?
Dave Vellante
>> And you're doing this in Python. You're not vibe coding this or you are a little bit?
Mohamad Ali
>> So I was vibe coding, I was doing all that stuff and then the agents would get built and I didn't know how they were getting built. And so I still do the vibe coding, but I said to Wade, "Wade, what we're going to do is we're going to start from scratch. We're going to start with Python." And in this case, an OpenAI, a key. And I went and I logged and I got my $5 key from OpenAI and then we started building stuff. And as we started building stuff, I actually saw the structure of the code and that gave me a sense as to how these digital workers are going to behave, how we're nesting the agents, how we're creating supervisory agents and agents that participate. How we're putting guardrails around them, how we're calling agents to do things the way we used to call functions before. I mean, in the old days, if you wanted to look up the weather, you would actually have a database and you have a function call for that database. Today you call an LLM to do that. And when it comes back, you have to put scaffolding around to check it. So I wanted to learn how to do all of that and then I could go back to vibe coding and then I would understand what the vibe code is doing, but now I understand how to motivate .
John Furrier
>> You're a Senior Vice President, head of consulting. Okay? I love this because we saw shadow IT. IT guy goes around his boss, go puts his credit card down, goes to Amazon, builds a prototype, gets his hands slapped and gets promoted. How has shadow AI changed? Because you're essentially shadow AI right there. I mean, I guess you're the boss, but we're seeing away with it. We're seeing instances where executives, because ...
Mohamad Ali
>> Are building things.
John Furrier
>> They've been engineers in their earlier lives. They know how to code, but they don't know the syntax .
Mohamad Ali
>> So this is a great question, right? Because we had this problem and we came up with a way to address it. So I'm actually encouraging all of my executives, I had a hundred of the top executives and I basically said, "Unless you guys can do this, unless you could write your own digital workers, you will never learn how to manage these digital workers and you're not going to have a future." And the people who can, and there's a guy who runs Canada for us, he does this. He knows how to manage digital workers and his profitability has now risen to the third-highest country at all of IBM because he knows how to use digital workers, deploy them, manage them.
John Furrier
>> You think that's why? You really do have that evidence .
Mohamad Ali
>> I know that because every week he sends me a note as to what he's doing.
John Furrier
>> his agent. Mohamad wakes up at 7:00, send him email. We know he's online. We see his green dot.
Mohamad Ali
>> But to your shadow IT thing, if people are building agents, I want to know they exist, right? And so that's why I gave them complete freedom to build whatever agent they want on whatever AI platform they want, but it all has to run through this common layer. And so now I actually have visibility, observability across all the AI everywhere. And so no matter who builds an AI someplace, we will see it. And this allows us to do that, the hire to retire. So if you build an agent that nobody's using, eventually we're going to decommission it. We're going to starve it, it's not going to get tokens, right? So it's going to retire.
Dave Vellante
>> So you don't give them a token budget?
Mohamad Ali
>> Right. So it's going to retire. So people can use whatever tokens they want today.
Dave Vellante
>> So do they have a token budget or they can ...
Mohamad Ali
>> They can do whatever-
Dave Vellante
>> Unlimited.
Mohamad Ali
>> Right now it's unlimited.
Dave Vellante
>> Okay. Let chaos rein and then reign the chaos in.
Mohamad Ali
>> That's right. And then you have-
John Furrier
>> Blank check on tokens.
Mohamad Ali
>> And then you have to have this hire to retire concept of the digital workers, right? So the hire is that you could go hire whatever you want, you could use whatever your token, right? But if it's not useful, it's not productive to the company and we can see that, then you turn off the token fee to it. You retire it. And so we're going to learn a lot of things .
John Furrier
>> Shadow AI is a feature, not a bug because what you want to do, that's the future of work. You just got to do all the work. We'll have a great masterclass here and of course congratulations on all the momentum and success. We look forward to doing deep dives on all these things.
Dave Vellante
>> Yeah, many more questions. we'd love to have you back.
John Furrier
>> Yeah. We're getting the hook here. Mohamad Ali, Senior Vice President, head of IBM consultant. Again, AI is impacting every part of the organization, it's changing how the workflows are going to be built and run and invested in. This is theCUBE, doing our part. Bringing you the data soon will be agents. I'm John Furrier with Dave Vellante. Thanks for watching.
John Furrier
Dave Vellante
