Straker extends IBM partnership with NZ$28m deal as AI co-innovation deepens

• Straker renews and expands its global partnership with IBM in a three-year deal worth NZ$28m on anticipated volumes.
• The partnership extends beyond translation services into co-development of AI language models and IBM Cloud collaboration.
• IBM’s strong traction in AI positions Straker as a key partner in the global IBM Ecosystem, opening new enterprise AI opportunities.

Special Report: Straker (ASX:STG) has renewed and expanded its global partnership with IBM (NYSE:IBM) through a three-year extension valued at about NZ$28 million to accelerate deployment of AI translation and co-develop new language models on IBM Cloud.

The agreement, effective January 1, 2026, runs through December 2028 and includes an option for a further one-year extension.

Revenue under the deal will remain usage-based, providing Straker with continued visibility across IBM’s global operations, where more than 10,000 employees already use its AI-driven Slack translation app.

This partnership builds on a long-standing relationship that began in 2021 when IBM appointed Straker as its Strategic Translation Service Provider.

The renewal marks a major step forward as the collaboration expands beyond localisation into broader AI co-innovation, embedding Straker more deeply within IBM’s technology ecosystem.

“This agreement marks a significant milestone for Straker, reflecting our focus on our AI technology for high-value enterprise clients, and our ability to meet stringent quality and volume requirements,” said Straker CEO Grant Straker.

“This partnership aligns perfectly with our five-year vision to unify our platforms into a single, AI-driven enhanced ecosystem.

“Our technology is designed to use our AI platform and technology to deliver precisely the speed, streamlined workflow, and cost efficiencies that global leaders require for both planned and last-minute translation needs.”

AI token billing and joint language models

A significant portion of the new agreement will move to AI token billing, boosting Straker’s mix of AI-driven revenue and deepening its integration into IBM’s global workflow.

Straker’s IBM collaboration has expanded beyond localisation services and the company is now recognised as part of the IBM Ecosystem Partner network, with the relationship now managed primarily through IBM Japan.

The expanded scope includes joint development of customised Small Language Models (SLMs) using IBM’s watsonx AI and Straker’s proprietary Tiri platform.

Early testing has demonstrated superior accuracy and speed against industry benchmarks, validating the commercial potential of smaller, domain-specific AI models.

Momentum builds in enterprise AI

The announcement caps a run of momentum for Straker. The company recently announced a significant new agreement with a major global enterprise customer for the provision of translation and related services.

The contract, effective September 1, 2025, runs for 24 months until August 31, 2027 and is valued at NZ$2.44 million annually, or NZ$4.88 million over the term, depending on word count.

Straker posted record adjusted EBITDA of $NZ4.8m in FY25 along with gross margins of 67%.

This article was developed in collaboration with Straker, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.