(Reuters) - IBM ( IBM ) surpassed analysts' estimates for fourth-quarter profit on Wednesday, driven by demand in its high-margin software unit as businesses ramped up IT spending, sending its shares soaring about 10% in extended trading.

The company's software segment recorded its biggest revenue jump in five years, as customers prioritized spending on cloud infrastructure amid a rush to adopt the data-intensive generative artificial intelligence technology.

IBM's ( IBM ) AI Book of Business - a combination of bookings and actual sales across various products - stood at more than $5 billion inception-to-date, up about $2 billion from the third quarter.

The company made its "Granite" family of AI models open-source in May, in contrast to rivals such as Microsoft, which charge for access to their models.

IBM's ( IBM ) approach is in line with Chinese startup DeepSeek, which last week launched a free AI assistant that it said uses less data at a fraction of the cost of incumbent services, fueling concerns over the dominance of U.S. tech.

"DeepSeek was an initiation that open (source) AI can play a role in the overall GenAI space," IBM ( IBM ) Chief Financial Officer James Kavanaugh told Reuters in an interview.

He, however, declined to provide details on whether IBM ( IBM ) plans to offer DeepSeek's models on its Watsonx platform, which allows users to enhance code for AI programs or deploy chatbots.

IBM's ( IBM ) AI book is dominated by consulting, which currently makes up about 80% of it. Software constitutes only a fifth.

Revenue from the consulting segment fell about 2% to $5.2 billion in the quarter, more than analysts' expectation of an about 1% drop.

Companies have focused spending on longer-term consulting deals, centered around integrating AI in their businesses, which is yet to be reflected in IBM's ( IBM ) revenue.

Total revenue was relatively flat at $17.55 billion for the quarter and largely in line with analysts' estimates, according to data compiled by LSEG.

Its software sales growth of more than 10% was also partly countered by weakness in the infrastructure segment, which recorded a near-8% decline in revenue as its mainframe business faces tepid demand on the back of older products.

IBM ( IBM ) posted adjusted per-share earnings of $3.92 for the quarter ended December, compared with analysts' average estimate of $3.75.