IBM’s stock took a significant hit after Anthropic announced that its AI model, Claude, can automate the modernization of COBOL code, a programming language crucial to many industries, including finance and government. This news prompted a wave of panic selling among IBM investors, particularly as COBOL’s aging infrastructure faces a declining number of skilled developers. Cobol supports around 95% of ATM transactions in the U.S., yet the shrinking workforce capable of managing it creates a vulnerability for companies like IBM, which have historically profited from services surrounding COBOL systems. The swift market reaction highlights the disruptive potential of incremental AI advancements targeting such legacy systems, which can streamline modernization efforts significantly, leading to a decline in IBM’s stock price amid fears of decreased market dominance.
Anthropic’s Claude Code disrupts IBM with COBOL automation
