Shares of IBM are taking a deep dive following news that Anthropic’s AI model can now update a system that has underpinned the global financial system for decades.
In a new announcement, Anthropic says its AI tool Claude Code can now dramatically accelerate the modernization of legacy COBOL (Common Business-Oriented Language) systems.
COBOL is a decades-old programming language that still runs on many IBM mainframes, but the number of engineers fluent in it is shrinking every year. IBM earns a significant portion of its revenue from customers operating these legacy systems. The high cost and complexity of modernizing COBOL environments have long discouraged clients from overhauling platforms that, while aging, continue to function reliably.
But Anthropic says Claude Code is a game-changer.
“COBOL is everywhere. It handles an estimated 95% of ATM transactions in the US. Hundreds of billions of lines of COBOL run in production every day, powering critical systems in finance, airlines, and government.
Despite that, the number of people who understand it shrinks every year.
The developers who built these systems retired years ago, and the institutional knowledge they carried left with them. Production code has been modified repeatedly over decades, but the documentation hasn’t kept up.”
Anthropic says modernizing large COBOL environments required years of consulting work to map workflows and untangle dependencies. But with Claude Code, the AI startup says it believes that the cost and timeline could be significantly compressed.
“Modernizing a COBOL system once required armies of consultants spending years mapping workflows. This resulted in large timelines and high costs that few were willing to take on…
Tools like Claude Code can automate the exploration and analysis phases that consume most of the effort in COBOL modernization… With AI, teams can modernize their COBOL codebase in quarters instead of years.”
News of Claude Code’s latest capability sent IBM (IBM) shares plunging 13.15%, its largest single-day decline since 2000. IBM is also down over 27% this month, putting it on the path for its biggest monthly devaluation since 1968.
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