2026.29: Mainframes and Main Characters

July 18, 2026

1:08

Imagine IBM’s iconic mainframe — once the backbone of enterprise IT — now facing its biggest crisis in over a century. At 8:07 on a Monday morning, IBM’s stock plummeted, and the reason? According to Ben Thompson in Stratechery, AI’s ability to replace old-school backend systems is making mainframes seem less essential than ever. That’s not just a tech shift; it’s a historic moment for a company whose hardware defined generations. Now, here’s where it gets interesting — Ben points out that IBM’s own AI investments, while promising, can’t save the core business that’s waning. Meanwhile, OpenAI keeps surprising us with fresh experiments, from lawsuits to new hardware ideas, hinting that their focus might be shifting away from simple chatbots to more integrated AI products. And get this — Netflix, once poised to dominate Hollywood, looks increasingly vulnerable, mimicking YouTube’s disposable model instead of building lasting franchises. That shift is subtle now, but it’s exactly the kind of signal that usually defines the next cycle.

Jean Pigozzi via Andy Hertzfeld on left, GenAI via Muse Image on right

Welcome back to This Week in Stratechery!

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On that note, here were a few of our favorites this week.

The End of the Mainframe? IBM’s stock experienced the worst day in its history, which is saying something considering the company has been a public stock for 115 years. The product most synonymous with that history is the mainframe computer; mainframes defined the first wave of IT, and they are so useful and essential that IBM’s customer base is largely the same as it was half a century ago. Now, however, mainframe sales and the software that runs on them are faltering; management blamed AI spend, but as I argued in Wednesday’s Update, the real concern for IBM is that AI’s ability to port the essential backend programs that run on archaic technology will mean those missed sales never come back. — Ben Thompson

The Continuing Adventures of OpenAI. The fun with OpenAI never ends, and the middle of the summer is no exception. In Monday’s Update Ben parsed a new lawsuit from Apple that looks like more smoke than fire, and in Tuesday’s Update he doubled back to cover the revamped ChatGPT app on the Mac and what it signals about the company’s priorities going forward. On this week’s episode of Sharp Tech, and both episodes of Dithering, we discussed all these topics, as well the reports of OpenAI’s new hardware product — an ambient speaker, with robotic components — and why that idea sounds like a great first experiment in the hardware category. — Andrew Sharp
Is Netflix Washed? It was only last December that Netflix was set to buy Warner Bros. Discovery, dominate Hollywood in perpetuity, and compete with YouTube using a massive library of hit franchises and HBO IP. That idea was abandoned in February and it’s been a rocky year ever since, including another hit to the stock on Thursday and Friday. I wrote about all of it on Sharp Text this week, where I marvel at how disposable the original content has become and argue that the attempts to retain attention by mimicking YouTube (and possibly Tubi?) have left the biggest premium platform in the world looking more mortal than ever. — AS

Stratechery Articles and Updates

Apple Sues OpenAI, Apple’s Real Problem — Apple is suing AI for stealing trade secrets; there is one guilty employee, but this mostly feels like lashing out.
The OpenAI Super App, ChatGPT = Codex, Whither Chat — OpenAI has refashioned Codex as the new ChatGPT; is the company abandoning the chat category they pioneered?
IBM Misses, IBM’s Mainframe Moat, IBM’s Many AI Problems — IBM announced preliminary results that spooked the software market generally; this is a story, however, specifically about IBM and its mainframe franchise.

Sharp Text by Andrew Sharp

Is Netflix Washed Now? — Watching Netflix as the platform exits its prime.

Dithering with Ben Thompson and Daring Fireball’s John Gruber

This week’s Stratechery video is on A Script for Mark Zuckerberg.

Audio Transcript

Welcome back to This Week in Stratechery!

On that note, here were a few of our favorites this week.

The End of the Mainframe? IBM’s stock experienced the worst day in its history, which is saying something considering the company has been a public stock for 115 years. The product most synonymous with that history is the mainframe computer; mainframes defined the first wave of IT, and they are so useful and essential that IBM’s customer base is largely the same as it was half a century ago. Now, however, mainframe sales and the software that runs on them are faltering; management blamed AI spend, but as I argued in Wednesday’s Update, the real concern for IBM is that AI’s ability to port the essential backend programs that run on archaic technology will mean those missed sales never come back. — Ben Thompson

The Continuing Adventures of OpenAI. The fun with OpenAI never ends, and the middle of the summer is no exception. In Monday’s Update Ben parsed a new lawsuit from Apple that looks like more smoke than fire, and in Tuesday’s Update he doubled back to cover the revamped ChatGPT app on the Mac and what it signals about the company’s priorities going forward. On this week’s episode of Sharp Tech, and both episodes of Dithering, we discussed all these topics, as well the reports of OpenAI’s new hardware product — an ambient speaker, with robotic components — and why that idea sounds like a great first experiment in the hardware category. — Andrew Sharp
Is Netflix Washed? It was only last December that Netflix was set to buy Warner Bros. Discovery, dominate Hollywood in perpetuity, and compete with YouTube using a massive library of hit franchises and HBO IP. That idea was abandoned in February and it’s been a rocky year ever since, including another hit to the stock on Thursday and Friday. I wrote about all of it on Sharp Text this week, where I marvel at how disposable the original content has become and argue that the attempts to retain attention by mimicking YouTube (and possibly Tubi?) have left the biggest premium platform in the world looking more mortal than ever. — AS

Stratechery Articles and Updates

Apple Sues OpenAI, Apple’s Real Problem — Apple is suing AI for stealing trade secrets; there is one guilty employee, but this mostly feels like lashing out.
The OpenAI Super App, ChatGPT = Codex, Whither Chat — OpenAI has refashioned Codex as the new ChatGPT; is the company abandoning the chat category they pioneered?
IBM Misses, IBM’s Mainframe Moat, IBM’s Many AI Problems — IBM announced preliminary results that spooked the software market generally; this is a story, however, specifically about IBM and its mainframe franchise.

Sharp Text by Andrew Sharp

Is Netflix Washed Now? — Watching Netflix as the platform exits its prime.

Dithering with Ben Thompson and Daring Fireball’s John Gruber

Asianometry with Jon Yu

The Cochlear Ear Miracle

Sharp China with Andrew Sharp and Sinocism’s Bill Bishop

K-Shaped Economic Data And Its Implications; Ma Xingrui News; Closing Window for Open Source AI?; The SCS and International Law

Greatest of All Talk

Everyone at Summer League Is Thrilled, The Summer of Second Apron Angst, How to Be an NBA GM

Sharp Tech with Andrew Sharp and Ben Thompson

The Continuing Adventures of OpenAI, Apple’s Trade Secrets Lawsuit, Q&A on Mainframes, Meta, Daylight Savings Time

This week’s Stratechery video is on A Script for Mark Zuckerberg.

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