Last week, IBM gave the market a real scare. Its shares fell after the company warned that mainframe sales — those computing monsters used by banks and large enterprises — were much worse than expected. CEO Arvind Krishna stepped out to explain that it’s not that the mainframe is dead, but that artificial intelligence is taking all the money from technology budgets.
What exactly happened? In the last quarter, IBM billed less than expected in its mainframe business, which is one of its cash cows. Investors got scared and shares fell about 7% in one day. Krishna, in a conference with analysts, said companies are reallocating IT budgets toward AI, and that hit traditional hardware sales hard. But he insisted: the mainframe is not in retreat, it’s just suffering a temporary diversion of investment.
Why does this matter?
The mainframe has been IBM’s workhorse since the 1960s. Banks, airlines, governments: all depend on these beasts to process massive transactions. If IBM says AI is eating its budget, it’s a sign that companies are prioritizing artificial intelligence over upgrading their classic infrastructure. And that has consequences: it can delay modernization projects, but it also shows that AI is not just hype, but is really moving the needle on technology investment.
For Argentines, this is relevant because many local companies — banks, prepaid health plans, retail chains — use IBM mainframes. If the trend is confirmed, they could see delays in upgrades or have to fight over budget between AI and legacy systems. Additionally, IBM’s cloud services market (which competes with AWS and Azure) also suffers if the mainframe falters.
Krishna, however, remains optimistic: he says that when the peak of AI investment passes, companies will return to buying mainframes. But in the meantime, the market is nervous. And for good reason: if AI is truly cannibalizing traditional hardware, the future of mainframes looks more uncertain than ever.
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