A New Frankenstein: IBM’s Historic Divestment and Engendering AI
“Then came the mines, then came the ore
– Dire Straits, Telegraph Road
Then there was the hard times, then there was a war”
NEW YORK, NY – Employing more than 90,000 people in 115 countries, IBM’s digital services division has officially detached from the technology giant in an act of corporate mitosis to form Kyndryl Holdings, Inc., which made its debut on the New York Stock Exchange (NYSE) last week, with IBM retaining 19.9% of the new company’s shares, as well as its $16.6 billion Global Business Services unit.
IBM CEO Arvind Krishna described the spin off as “one of many actions we are taking to sharpen our focus on hybrid cloud and AI”. Board members were announced in September, chaired by Kyndryl CEO and IBM’s senior VP for Global Markets, Martin Schroeter, along with top executives from Johnson & Johnson’s, Raytheon, Siemens and Dow Chemical.
The ready-made multinational has $60 billion worth of backlog with 4,600 customers worldwide on projects that span the telecommunications, retail, airline, financial services, and automotive sectors, emanating from IBM’s infrastructure management business, a.k.a, Global Technology Services (GTS), which coordinates implementation of IT infrastructure projects between its clients and third-party vendors like Oracle and HP.
GTS represented more than 60% of IBM’s annual revenue in 2019, according to Krishna, revealing the major significance of divesting from its managed IT infrastructure services. Nevertheless, the move squares perfectly with the company’s history of ditching substantial businesses, such as PCs, semiconductors and hard drives over the years.
Beyond the typical refrains of “financial health” and “streamlining” operations that usually accompany IBM’s exits, the larger picture also shows how the global corporation works as a leading incubator of sorts to facilitate the roll out of ICT (information and communication technologies) across all sectors, progressively advancing the broader agenda behind the burgeoning data-driven economic paradigm.
Plans for the split have been in the works for at least two years, following IBM’s $34 billion acquisition of Red Hat in 2019 – the largest ever for the storied company. IBM had held a minority stake in the open-source, enterprise software maker since 1999, which figures among the biggest Linux-based software companies in the world and has made significant contributions to the development of advanced AI technologies through its open standards solutions.
IBM is signaling the next phase of its ICT implementation strategies by taking full control of the North Carolina-based concern and partnering with the likes of energy behemoth Schlumberger to “accelerate digital transformation across the oil and gas industry” through Red Hat’s OpenShift cloud-scaling platform, and graphics software industry leader Adobe, which will apply the technology to “deliver great digital experiences in any environment”.
Kyndryl’s backlog is a clear indication that a large-enough cohort of customers has committed to implementing the hardware required to kick start the data-driven economy and justify IBM’s offloading of its highly-profitable infrastructure management service, and shifting their focus to the regulatory aspects of interoperable cloud-based technologies, as delineated in the recently-published framework document Cloud Data Management Capabilities (CDMC).
As reported by Silicon Icarus, the CDMC was authored by a tech consortium with intimate ties to IBM’s data management division and IBM Promontory, which was part of the managed infrastructure business that is now Kyndryl, will take on the task of promoting the guidelines to the international regulatory authorities.
What hath God Wrought
Supply chain disruptions, pandemic panic and vaccine politics have served well to distract us from the ongoing changes taking place behind the scenes. Under the cover of these headline-grabbing events, a massive overhaul of legacy communications and information management systems is currently unfolding across virtually every sector of the world economy.
Even before Samuel Morse sent the first electric telegraph message from Washington DC to Baltimore in 1884, networked communications had been in a constant state of evolution and ever-increasing sophistication. Decades earlier, British scientist and balloon-inventor Michael Faraday discovered the insulating properties of the white sap produced by a species of tree found mainly in Malaysia. Gutta-percha, better known as Latex, would spur the “cable boom” of the mid 19th century.
Soon enough, latex-covered copper wiring carrying electronic communications across the ocean floor would drive excessive demand for the exotic tree trunks. As cables became the preferred method of communication of colonial military strategists, it took less than forty years for the jungles of Southeast Asia to be completely fleeced of the genus. In 1883, the British parliament passed a law banning the harvesting of latex in a futile effort to save a crucial part of its supply chain.
This example of deliberate ecological devastation at “the dawn of the global information society” is one of many recounted by Kate Crawford in her book, Atlas of AI: Power, Politics and the Planetary Costs of Artificial Intelligence, which expertly strips away the self-serving futuristic narratives that surround AI and reframes it in its proper context as “a structure of power that combines infrastructure, capital, and labor”.
Crawford untangles the “deep interconnections between the tech sector and the military” to show how the true face of AI and the “small and homogenous group of people” who are behind its construction and development. “AI systems,” she writes, “are ultimately designed to serve existing dominant interests. In this sense, artificial intelligence is a registry of power”.
As we can see by IBM’s business strategies in the AI space, it is a registry of power in the literal sense, as well. Indeed, what we call AI is simply the collective result of “the mass capture of data” and the algorithms developed to perpetuate “the profoundly unequal and increasingly exploitative labor practices that sustain it”. AI, as Crawford correctly summarizes, is “politics by other means”.
Green Cover for Black Deeds
The COP26 climate change conference that is currently taking place in the United Kingdom brings together most of the same global business interests that are thrusting forward the data-driven economic paradigm, which the AI systems and cloud-based technologies are designed for.
Hiding behind terms like “sustainability”, “resilience” and “green energy”, IBM and other corporate purveyors of planetary devastation and exploitative labor practices, avail themselves of the highly orchestrated climate change narrative to move their agenda forward. Central to it is the concept of the smart city, which is meant to bring together the worlds of AI and ICT in an urban setting that can “optimally regulate and control resources by means of autonomous IT systems”, as a IBM-partner Siemens describes them.
Smart cities are among the main topics being discussed at the COP26 conference, including a multi-city showcasepresented by British architectural firm Arup and c40, an international coalition of city mayors, led by Michael Bloomberg, promoting smart city infrastructure projects, such as the highly controversial Rio Operations Center in Rio de Janeiro – a “c40 city” – built by IBM and which exemplifies the “material consequences of including AI and related algorithmic systems into the decision-making systems of social institutions like education and health care, finance, government operations… and the justice system”.
“The field of AI,” Crawford observes in Atlas, “is explicitly attempting to capture the planet in a computationally legible form.” International Business Machines has been at the leading edge of this effort for over a century and is moving ahead to the next phase of this project.
Given the mendacious co-option of environmental causes to cloak the deployment of rare-earth mineral-dependent digital surveillance technologies and devices of the emerging Trillion-dollar IoT industry, it seems fitting that the former site of an IBM PC-manufacturing plant west of Glasgow was reportedly being used for storage related to the COP26 conference.
