India, July 14 -- IBM warned that the fast-growing demand for AI infrastructure is reducing spending on software, showing that the AI boom is starting to hurt software companies, according to IBM's preliminary second-quarter results

The company said it could not keep up with the sudden shift in customer spending from software to AI infrastructure like servers, storage, and memory. IBM's warning shocked investors and raised fresh concerns that AI spending is changing where companies are putting their money, according to Reuters.

After the announcement, IBM shares crashed about 22% in regular trading, while they fell as much as 25% in premarket trading, marking what could be the company's biggest one-day fall ever. The selloff spread acro...