My colleague Sharon Goldman explores IBM’s rebound in our Fortune 500 package that published this week. In many ways, it’s a model of resilience, having appeared on the Fortune 500 every year since debuting at No. 61 on the inaugural list in 1955. But it was the only brand among 17 U.S. tech companies valued at $100 billion or more to have lost market value over the past eight years when Krishna took over. 

Krishna is a 35-year IBM veteran who’s also its first CEO to boast an engineering background. And as Goldman writes, he was struck early on by the potential of AI. She writes: “Krishna, a PhD engineer with decades of research experience, instantly recognized a game changer—and a huge opportunity. Once these models were mature enough, he realized, they would be able to help businesses handle everything from customer service to chemistry equations to climate modeling with unprecedented scale and efficiency—creating powerful new products for IBM to sell.” 

Goldman adds that he has “steered billions in R&D money into new AI ‘foundation models’ and the infrastructure to support them. He also pushed the company to prepare for the rise of AI by updating its hybrid cloud platform—data-storage technology that Krishna had championed as the head of IBM’s cloud division.”

With the stock up over 20% year to date, there are certainly glimmers that Big Blue could be gaining momentum. Krishna is certainly up for the challenge. As he told Sharon: “Engineers don’t get scared about building big things.”

Read Sharon’s full story here.

More news below.

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

TOP NEWS

Ray Dalio rings in AI era

Billionaire investor Ray Dalio signaled the end of “the days of people making decisions in their own heads” and emphasized the significance of the AI era in an excerpt of his new book, How Countries Go Broke. “Those who know how to use these tools effectively will be rewarded, and those who fail to do so will be penalized,” Dalio writes.

Chipotle CEO’s secret ingredient

In a recent interview with Fortune at Chipotle headquarters, CEO Scott Boatwright noted that the fast-casual chain is asking employees to bring back “basic greetings” as he chases a goal of raising annual sales per store to $4 million. Chipotle also plans to open new stores and expand into Mexico.  

Snowflake CEO: Now is the time to acquire startups

Snowflake CEO Sridhar Ramaswamy told Fortune in a new interview that the current climate is the right time for big companies to acquire startups. Earlier this week, the data storage company announced plans to acquire startup Crunchy Data for a reported $250 million sum.

Fortune 500 Power Moves

Avis Budget Group (No. 360) announced that CEO Joseph A. Ferraro will transition to board member, effective July 1. He will be succeeded by Brian Choi, the company’s Chief Transformation Officer.

Wells Fargo out of the doghouse

The Federal Reserve said Tuesday that Wells Fargo is no longer subject to harsh restraints the Fed placed on the bank in 2018 over its fake-accounts scandal. “We are a different and far stronger company today because of the work we’ve done,” said Wells Fargo CEO Charlie Scharf, who announced the 215,000 employees would receive a $2,000 award for turning the bank around.

Musk says 'beautiful' is actually 'disgusting'

Former White House DOGE boss Elon Musk called President Donald Trump’s “big, beautiful” tax and spending package a “disgusting abomination,” amping up his criticism just as the Senate is aiming to quickly pass the measure and get it signed into law by July 4.

Trump complains Xi is 'hard to make a deal with'

Trump described Xi Jinping as “extremely hard to make a deal with” as the U.S. and China face off over American claims that Beijing is reneging on a trade truce signed in Geneva last month. Talks between the two have recently stalled.

Trump's 50% metals tariffs come into effect

Trump’s 50% tariff on steel and aluminum imports came into effect today. Announced last week and signed by Trump on Tuesday, the order doubles levies from 25% to 50% on all metals imports to the U.S. The U.K. was granted a reprieve of sorts, with a 25% tariff remaining in place while details of its recently announced trade deal with the U.S. are worked out.

The markets

• The S&P 500 was up 0.6% Tuesday. The index is up 1.5% YTD. 
• S&P futures were trading up 0.1% this morning. 
• The Stoxx Europe 600 was up 0.5% in early trading. 
• Asia was up: Japan was up 0.8%. Hong Kong rose 0.6%. Shanghai gained 0.4%, and India’s Nifty 50 was up 0.3%.
• Bitcoin was sitting up at $105,400 this morning.

From the analysts 

• Convera on the USD: "Beyond short-term fluctuations, a bigger concern for long-term dollar positioning is the growing unease around de-dollarization. Trump’s proposed 'revenge tax'—Section 899 of his bill—introduces yet another disincentive for foreign investors, further eroding confidence in Treasury bonds and U.S. assets. Already, erratic trade policies and the nation’s deteriorating fiscal accounts have put pressure on dollar-denominated holdings, prompting global institutions to reassess exposure. If foreign investors perceive heightened risks, capital flow dynamics may shift further away from the dollar, reinforcing the long-term challenges facing the currency," per George Vessey.
• EY on jobs: "The May jobs report will likely indicate that labor market dynamics slowed last month as elevated policy uncertainty, tariffs and reduced immigration flows weighed on employment growth. We anticipate the economy added 93,000 jobs in May following a 177,000 gain in April. The unemployment rate was likely unchanged at 4.2% while the labor force participation rate likely fell back to 62.5% as stricter immigration measures gradually weighed on labor supply. As companies put hiring plans on hold but refrain from broad-based layoffs, we foresee the pace of job creation slowing well below trend and the unemployment rate rising toward 4.8% by year-end," per Lydia Boussour.
• UBS on market inflection: "After a steep sell-off and almost as fast recovery, the markets have found some stability in recent weeks, trading in relatively narrow ranges. This calm won’t last indefinitely, but it will take unexpected policy news or growth and inflation data to inflect the narrative and push the markets outside these ranges. Because the markets have recently been pricing in better policy, economic, and earnings news, the near-term risk is that these expectations are not met. But on a one-year outlook such tactical inflections are largely irrelevant, and over that horizon the fundamental outlook remains constructive. For that reason, we believe an inflection to the downside is a buying opportunity," per Jason Draho.

Around the watercooler

Jamie Dimon for president? Why the banking CEO would be a welcome alternative for many voters by Jeffrey Sonnenfeld and Stephen Henriques (Commentary)

Nvidia’s chips are among the world’s hottest commodities. So why is the company likely trashing $4.5 billion worth of them? by Alexandra Sternlicht

The maker of Taser is the highest paid CEO, taking home $165 million—his new pay package and soaring stock made him a billionaire last year by Emma Burleigh

Trump team plans launch of digital wallet as crypto empire keeps expanding by Ben Weiss

AI godfather Yoshua Bengio says current AI models are showing dangerous behaviors like deception, cheating, and lying by Beatrice Nolan

CEO Daily is compiled and edited by Joey Abrams and Ian Mount.