AI Daily: IBM to partner with Anthropic on software development

Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly:

IBM, ANTHROPIC PARTNERSHIP: IBM (IBM) and Anthropic “announced a strategic partnership to accelerate the development of enterprise-ready AI by infusing Anthropic’s Claude, one of the world’s most powerful family of large language models, into IBM’s software portfolio to deliver measurable productivity gains, while building security, governance, and cost controls directly into the lifecycle of software development. Through the partnership, Claude will be integrated into select IBM software products, starting with IBM’s new AI-first integrated development environment, designed with advanced task generation capabilities for enterprise software development lifecycles, including software modernization. The IDE is available in private preview to select IBM clients and in early testing, more than 6,000 early adopters within IBM are using the new IDE, reporting productivity gains averaging 45 percent, translating to meaningful cost savings while maintaining code quality and security standards. As organizations move from AI experimentation to production deployment, they need solutions that integrate seamlessly with existing enterprise infrastructure and meet strict IT requirements. IBM brings proven capabilities in enterprise software delivery, hybrid cloud architecture, and regulated industry expertise to ensure AI tools work within the complex realities of global business operations.”

At TechXchange 2025, IBM “unveiled new and upcoming product capabilities designed to help enterprises move beyond AI experimentation and unlock productivity gains across development, operations and business workflows. Drawing thousands of attendees from around the world, TechXchange serves as a launchpad for IBM’s latest advancements in agentic AI, hybrid cloud, quantum computing and intelligent infrastructure. Generative AI has the potential to add trillions in economic value in the coming years. Yet, many organizations face barriers to adoption – ranging from fragmented hybrid environments to gaps in data quality and AI readiness. IBM’s latest announcements address these challenges with products built for production readiness, real-time governance and seamless integration across hybrid cloud ecosystems.”

AI STRATEGY: HSBC analyst Paul Rossington initiated coverage of Alphabet (GOOGL) with a Buy rating and $285 price target. The firm is positive on Alphabet’s artificial intelligence strategy via Gemini development, Ironwood chips and “gold-standard” datasets. The company’s two most valuable businesses are Google Search and Google Cloud while further growth will come from YouTube, the analyst tells investors in a research note. HSBC expects continued subscriber gains within YouTube Music and Premium. Further growth in Alphabet’s three core businesses should drive further margin expansion, the firm contends.
FINANCIAL CHALLENGE: Oracle (ORCL) became the best-performing megacap stock of 2025 after its executives said last month that the once-sleepy database firm will generate an astonishing $381B in revenue from renting out specialized cloud servers to OpenAI and other artificial intelligence developers over the next five fiscal years. But internal documents show the fast-growing cloud business has had razor-thin gross profit margins in the past year or so, lower than what many equity analysts have estimated, The Information’s Anissa Gardizy, Anita Ramaswamy and Cory Weinberg report. That could raise questions about whether the AI cloud expansions undertaken by Oracle and its rivals will affect profitability and sustain investors’ expectations.

NVIDIA CHIPS: Elon Musk’s xAI is set to spend at least $18B to acquire roughly 300,000 more Nvidia (NVDA) chips for its Colossus 2 project in Memphis, The Wall Street Journal’s Alexander Saeedy reports. In July, the Tesla (TSLA) CEO said in July that Colossus 2 will have a total of 550,000 chips and has separately signaled it could eventually have a million processing units.

MULTIGENERATIONAL OPENAI PACT: Jefferies upgraded AMD (AMD) to Buy from Hold with a price target of $300, up from $170. OpenAI’s plans to buy six gigawatts of AMD equipment changes the company’s “AI narrative,” the firm tells investors in a research note. Jefferies says the OpenAI partnership provides “strong validation” of AMD’s artificial intelligence roadmap and the level of AI demand in general. The firm cites its better server checks and AMD’s new “multigenerational” opportunity with OpenAI for the upgrade. Jefferies came away from its Asia trip “incrementally positive” on AMD due to potential share gains in server central processing units with Venice.