Link: Mainframes are finding a new life in the AI era, as some banks, insurance providers, and airlines look to use them to run AI locally rather than in the cloud (Belle Lin/Wall Street Journal)

Banks, insurance providers, and airlines still rely on mainframes for high-speed data processing. Now, some are applying AI to transaction data directly on the hardware instead of the cloud.

For banks, analyzing potentially fraudulent transactions must happen in milliseconds. Steven Dickens from Futurum Group emphasizes the need for real-time processing on mainframes.

IBM reported 6% growth in its mainframe business as it supports massive transactions efficiently. The latest IBM zSystem mainframe can hold up to 40 terabytes of data and cost over $1 million.

IBM dominates the mainframe market with 96% share. Despite a decline in new sales, many enterprise leaders plan to increase mainframe usage.

Mainframes are limited by their computing power and integration issues but are highly reliable and secure against cyberattacks. IBM's latest mainframe can also run advanced AI models and large language models.

Businesses like Ponce Bank and Verizon use a mix of mainframes and cloud. Efforts to replace mainframes with the cloud continue, but the transition is slow due to the status quo's power.

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