Shares of International Business Machines plunged 13.2% on Monday, marking their sharpest single-day decline since October 2000, after Anthropic spotlighted how its Claude Code tool could accelerate modernization of COBOL systems running on IBM mainframes.
COBOL, a decades-old programming language, remains deeply embedded in banking, insurance, and government infrastructure, particularly on IBM systems. Traditionally, modernizing COBOL environments has required large consulting teams and years of workflow mapping and system analysis.
Anthropic said its AI tool can automate much of that exploration and analysis, potentially shrinking modernization timelines from years to quarters. The announcement heightened investor concerns that generative AI could disrupt established enterprise software and services models tied to legacy system upgrades.
The selloff extended beyond IBM. Shares of cybersecurity firms including CrowdStrike and Datadog also fell as investors assessed the broader implications of Anthropic’s expanding AI capabilities, including new security-focused tools.
The market reaction underscores growing anxiety that AI-powered coding and automation tools may pressure traditional IT services, consulting revenue, and infrastructure-dependent business lines.
