Why in the world would economists need to study this? It's been known that large bureaucracies have been dysfunctional for over a couple of decades now if not centuries. The large reason is because 1) the incentives to do great work are not there (most of the credit for a huge company's success goes to the CEO who gets 100X the salary of a regular worker while delivering usually pretty much nothing) 2) politics usually plays a huge role which gives a huge advantage to your competition (i.e. your competition needs to spend less time on politics and more time on the actual product) and 3) human beings don't functionally work well in groups larger than 100-250 due to the overwhelming complexity of the communication needed in order to make this type of structure work. Incentives though I think are the primary driver - most people at companies like IBM don't have any incentives to actually care about the product they produce and that's the secret behind the ruin of almost every large company.

Edit: you also seem to be giving too much credence to Watson. Watson was actually mostly a marketing tool designed to win in Jeopardy and nothing else. It was constructed specifically to compete in that use-case and was nowhere near to the architecture of a general transformer which is capable of figuring out meta-patterns within language and structurally understanding language. You can read about Watson's design and architecture here if you're curious: https://www.cs.cornell.edu/courses/cs4740/2011sp/papers/AIMa...

Everything will make sense when you realize that IBM is a consulting company. They don't care about building great products. In fact building self-serve products will directly take away from their consulting revenue. They instead need to be good at marketing and selling their services. Watson was exactly that - a marketing demo that got them in the news cycle and helped them sell a giant wave of contracts under a single brand to unsuspecting CIOs of legacy non-tech companies. Every acquisition helps with this goal. Red Hat - locking companies into licenses and support contracts for the OS. HashiCorp & Confluent - locking companies into support contracts for their cloud infra.

>Why do they keep doing the same thing again and again? How are they generating actual revenue this way?

IBM has a ton of Enterprise software, backed by a bunch of consultants hiding in boring businesses/governments.

They also do a ton of outsourcing work where they will be big enterprise IT support desk and various other functions. In fact, that side has gotten so big, IBM now has more employees in India in then any other country.

> Ok, so does anyone remember 'Watson'? It was the chatgpt before chatgpt. they built it in house

I do. I remember going to a chat once where they wanted to get people on-board in using it. It was 90 minutes of hot air. They "showed" how Watson worked and how to implement things, and I think every single person in the room knew they were full of it. Imagine we were all engineers and there were no questions at the end.

Comparing Watson to LLMs is like comparing a rock to an AIM-9 Sidewinder.

Your fascination seems hinged on the fact that IBM has "lots of talent to make ML/LLMs work" which judging by what they've put out so far and talk publicly about, is very far from the truth. Anyone who has a clue seems to (rightly) have left IBM decades ago, and left are business people who think "Managed to increase margin by 0.1%" is something to celebrate.

They gave up on watson about 18 months before llm's popped up, and they have simply just not got enough cash on hand to compete. While the big boys grew fantastically bigger over the past 15 years as cloud happened ibm fumbled time after time and shrank ever smaller, and is now desperately hoping it can stay relevant. but in the end they just haven't got the resources to compete on that stage anymore.

> Ok, so does anyone remember 'Watson'? It was the chatgpt before chatgpt. they built it in house. Why didn't they compete with OpenAI like Google and Anthropic are doing, with in-house tools?

Leadership in IBM also thought that Watson was like what what OAI/Anthropic/Google are doing now. It wasn't. Watson was essentially a ML pipeline over-optimized on Jeopardy, which is why it failed in literally every other domain.

Outside of Jeopardy, Watson was just a brand.

To add to that i think their R&D labs along with HPE were one of the few to innovate on the memristor and actually build some fascinating concept machines.If i rememeber HPE's was 'The Machine'.

Athough i think they just di/dont know how to adapt these to market that isnt a enterprise behemoth , rather than develop/price it so more devs can take a hold and experiment.

There are entire niches of us that make a living (not at IBM) making certain IBM products actually do what they're supposed to. From my vantage point I see essentially zero maintenance going on with their products. I sincerely don't understand the market (why do people keep paying hundreds of thousands to millions of dollars for non-existent support?) - but whatever.

I’m pretty convinced there is a bell curve of “understanding what IBM does” where idiots and geniuses both have absolutely no idea.

It really is probably that strangest company in tech which you think could be mysterious and intriguing. But no one cares. It’s like no one wants to look behind the boring suit and see wtf. From my low point on that bell curve I can’t see how they are even solvent.