IBM Chairman and CEO Arvind Krishna participated in a panel session at the World Economic Forum in Davos, Switzerland on January 17, 2023.
Image: Stefan Wermuth | Bloomberg | Getty Images
IBM announced on Tuesday that it is divesting its weather unit, which includes The Weather Channel mobile app and websites, Weather.com, Weather Underground, and Storm Radar.
Francisco Partners, a tech-focused private equity firm, will acquire The Weather Company and its assets from IBM for an undisclosed sum. The transaction is expected to close by April and encompasses the weather unit’s forecasting science and tech platform, as well as enterprise data services for the broadcast, media, aviation, and ad tech sectors. Francisco Partners intends to enhance the consumer-facing aspect of the weather business by incorporating new tools for health and well-being, according to the announcement.
As part of the deal, IBM will retain access to the company’s weather data, which it utilizes to power some of its artificial intelligence models sold to enterprise clients. This system, which also incorporates NASA’s satellite data, focuses on analyzing ESG data and climate patterns, including natural disaster monitoring.
In 2016, IBM purchased the weather business for $2 billion and has reportedly been exploring a sale since at least April in an effort to streamline its operations. The weather unit currently serves an average of 415 million people monthly, and previous reports estimated the value of the pending deal to exceed $1 billion.
This divestiture aligns with IBM’s strategic shift as it concentrates on key growth drivers such as software, cloud services, and AI.
One of IBM’s key initiatives is Watsonx, an enterprise AI development tool set to launch in the third quarter. The company aims to lead in user-friendly AI development for businesses, partly due to the high demand for AI expertise and the shortage of skilled professionals in the field. The platform includes an AI-generated code feature, an AI governance toolkit, and a library of large-scale AI models trained on language, geospatial data, IT events, and The Weather Company’s weather data, which IBM will continue to leverage.
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