2026.29: Mainframes and Main Characters

IBM's stock suffered its worst single-day drop in 115 years after missing earnings, with management blaming AI spending but analysts warning that AI could permanently erode demand for mainframes by enabling migration of legacy software. OpenAI continued its summer activity with a revamped ChatGPT Mac app, hardware product rumors, and a lawsuit from Apple over trade secrets. Netflix faced renewed doubts about its content strategy and stock performance after abandoning a Warner Bros. Discovery acquisition.

Welcome back to This Week in Stratechery As a reminder, each week, every Friday, we’re sending out this overview of content in the Stratechery bundle; highlighted links are free for everyone. Additionally, you have complete control over what we send to you. If you don’t want to receive This Week in Stratechery emails there is no podcast , please uncheck the box in your delivery settings https://stratechery.passport.online/member/account/delivery . 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 https://stratechery.com/2024/enterprise-philosophy-and-the-first-wave-of-ai/ , 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 https://stratechery.com/2026/ibm-misses-ibms-mainframe-moat-ibms-many-ai-problems/ , 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 https://stratechery.com/2026/apple-sues-openai-apples-real-problem/ Ben parsed a new lawsuit from Apple that looks like more smoke than fire, and in Tuesday’s Update https://stratechery.com/2026/the-openai-super-app-chatgpt-codex-whither-chat/ 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 https://sharptech.fm/member/episode/the-continuing-adventures-of-open-ai-apples-trade-secrets-lawsuit-q-a-on-mainframes-meta-daylight-savings-time , and both episodes of Dithering https://dithering.passport.online/member/episode/open-ai-hardware , 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 https://sharptext.net/2026/is-netflix-washed-now/ , 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 https://stratechery.com/2026/apple-sues-openai-apples-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 https://stratechery.com/2026/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 https://stratechery.com/2026/ibm-misses-ibms-mainframe-moat-ibms-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? https://sharptext.net/2026/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 Sharp China with Andrew Sharp and Sinocism’s Bill Bishop Greatest of All Talk Sharp Tech with Andrew Sharp and Ben Thompson This week’s Stratechery video is on A Script for Mark Zuckerberg https://stratechery.com/2026/a-script-for-mark-zuckerberg/ .