A former IBM cybersecurity executive accused the company of getting hacked three times in the previous decade by foreign governments and then covering up the breaches. 

In a lawsuit unsealed this week but filed in 2020, William Barlow, who was IBM’s vice president of threat intelligence until August 2019, said IBM concluded Chinese hackers breached its core network between 2013 and 2016 but that the company then covered up the breaches and never disclosed them. Barlow also said at least two IBM subsidiaries were also breached, and that IBM covered up those breaches as well.

Barlow alleged in his complaint that IBM’s core network was “routinely hacked by foreign state actors and others,” adding that data was frequently stolen and government agencies were “never notified.” 

While the alleged breaches date back more than a decade, the news shows that cyberattacks, even those affecting large public tech companies such as IBM, sometimes never get disclosed, either to the public or to relevant government authorities. IBM is a major cybersecurity vendor to the U.S. federal government, which makes the alleged concealment especially significant. In the last few years, several data breach notification laws have been passed to counter this problem.   

Bloomberg first reported on the lawsuit.

IBM spokesperson Miki Carver declined to answer specific questions about the lawsuit and the underlying accusations. Instead, Carver told TechCrunch, “This complaint was filed six years ago, and the U.S. Department of Justice declined to intervene. IBM is confident that our actions followed the letter of the law.”

In particular, Barlow said IBM was among several victims of a hacking campaign carried out by APT 10, a Chinese government-linked group that then-FBI Director Christopher Wray said had targeted a “Who’s Who” of the global economy when its members were indicted in 2018. The hackers broke into both the company’s network and the data it maintained there in partnership with AT&T. 

Barlow alleged that in March 2017, intelligence officials from Australia, Canada, New Zealand, United States, and the United Kingdom — the so-called Five Eyes alliance — warned IBM of the breach, which prompted an internal investigation.

According to the complaint, the investigation concluded that APT 10 potentially breached IBM’s network more than 56,000 times between 2013 and 2016. Crucially, the company said it could not investigate further because it had not kept logs of who accessed its network and when — a basic security practice.

IBM then allegedly failed to alert any authorities or the U.S. government, one of its main customers. 

“As IBM and AT&T’s Core Networks’ infrastructure is archaic, hackers have been able to gain access to the system on numerous occasions and can roam almost anywhere undetected,” read the complaint, which explained that IBM’s internal investigation concluded four servers were compromised in the APT 10 hacking campaign.

“The attackers have compromised and/or accessed nearly 400 compromised accounts and almost 200 total systems and servers across every IBM business unit, eighteen countries, and multiple IBM products,” said an internal IBM report about the investigation into the breach, according to the complaint.

Jason Brown, a lawyer representing Barlow, told TechCrunch that his firm is “looking forward to aggressively litigating the matter.” 

“You can’t sell cybersecurity to the federal government while allegedly having these security problems within your own company,” said Brown. 

According to Barlow, other breaches he was aware of affected Trusteer, a cybersecurity startup acquired by IBM in 2013, which he says was breached in 2018; and Truven, a healthcare data startup IBM acquired in 2016, which he says was breached multiple times after the acquisition.

In both cases, Barlow accused IBM of failing to properly investigate and disclose these breaches. 

TL;DR

IBM stock surged 10% after Barclays initiated coverage with an overweight rating and $350 target, arguing that IBM’s infrastructure software is the “good part” of enterprise software immune to AI disruption. The gains extend a 30% May rally driven by a $10 billion quantum computing commitment and Trump administration funding.

IBM stock surged 10% on Monday after Barclays initiated coverage with an overweight rating and a $350 price target, roughly 11% above the opening price. The jump extends a run that has seen IBM gain nearly 30% in May alone, its best monthly performance in almost 24 years. The stock is now up 10% year to date, erasing losses from the SaaSpocalypse selloff that hit software stocks earlier in the year.

Barclays’ bull case is not primarily about quantum computing, though that features prominently. The core thesis centres on IBM’s infrastructure software portfolio, which serves large, heavily regulated enterprises and generates the majority of the company’s profit. In a market where vibe coding and AI agents are threatening horizontal SaaS companies, Barclays argues that IBM’s type of software, deeply embedded infrastructure tools, is precisely the category least vulnerable to disruption.

The software thesis

“While software has a negative investor connotation at the moment, IBM is offering infrastructure software (the good part) to large, often heavily regulated customers, which creates a very sticky set-up that should not see negative AI implications,” the analysts wrote. They expect mid-single-digit organic revenue growth and ongoing margin expansion, describing IBM as “a stable earnings compounder with a Quantum option.”

The distinction matters. The SaaSpocalypse punished software stocks indiscriminately, but the companies most exposed are those selling horizontal tools, project management, CRM, form builders, that AI can replicate. IBM’s software business, which includes middleware, database management, and enterprise integration platforms, sits at the infrastructure layer where switching costs are measured in years and compliance requirements create natural moats.

In their most optimistic bull case, Barclays set a price target of $449, representing 51% upside from the last close.

Quantum as “option value”

Barclays framed IBM’s quantum computing ambitions as additional upside rather than the primary investment thesis. “Quantum computing has the potential to become the next major compute paradigm, following the CPU and GPU eras,” the analysts wrote, comparing IBM’s positioning in quantum to Nvidia’s dominance in GPUs. Quantinuum’s massively oversubscribed IPO last week demonstrated that investor appetite for quantum exposure is running hot.

IBM has committed $10 billion to quantum computing over the next five years, according to a regulatory filing disclosed last week. The centrepiece is Anderon, a standalone quantum chip foundry headquartered in Albany, New York, built with $1 billion from the US Department of Commerce under the CHIPS Act and a matching $1 billion from IBM. Anderon will operate the first purpose-built 300-millimetre quantum wafer fabrication facility in the United States.

The Commerce Department’s $2 billion quantum portfolio, split across nine companies and announced on 21 May, is the largest single quantum R&D commitment in US history. IBM received the largest share. Smaller firms including D-Wave Quantum, Rigetti Computing, and their European counterparts are pursuing different quantum architectures with their own government backing.

The Trump clip

Adding a distinctly 2026 element to the rally is a video of President Trump from a December 2025 White House business roundtable, which has been recirculating on X and Reddit. Trump called IBM CEO Arvind Krishna “a legend” and said, “He’s taken the stock from a rather low price to a very nice price. I won’t say high because I’m sure you’re going to say it’s going to go up a lot more, right?”

Social media posts framed the clip as Trump endorsing IBM stock. Trump’s personal investment account has purchased IBM shares in recent months, according to Office of Government Ethics filings. The combination of a presidential mention, visible government support through the quantum funding programme, and a Barclays initiation has created a momentum loop that draws both institutional and retail interest simultaneously.

The bigger picture

IBM’s recent gains fit into a broader pattern of legacy computing companies finding new relevance in the AI era. Dell’s stock surged 32% last week on AI server demand. Cisco, once a dot-com era cautionary tale, has rallied on enterprise networking demand driven by AI infrastructure buildouts. IBM’s version of the story combines two threads: a software business that is defensible against AI disruption, and a quantum computing programme that could become transformative if the technology matures on schedule.

Whether the quantum option alone justifies the current run is debatable. IBM’s quantum programme is real and well-funded, but commercial quantum computing remains years away from generating meaningful revenue. Barclays is explicit that the investment case rests on the software business today and quantum as future upside. For investors burned by the SaaSpocalypse, the appeal of a software company whose customers cannot easily leave, and whose product category AI makes more valuable rather than obsolete, is straightforward.