IBM posts steepest daily drop since 2000 after Anthropic says AI can modernize COBOL

Shares of International Business Machines ​recorded their steepest daily ​drop in more ‌than 25 years ​on Monday, after AI startup Anthropic said its Claude Code tool could be ‌used to modernize a programming language run on IBM systems. IBM shares sank 13.2%, their biggest drop since October 18, 2000.

COBOL is ‌a programming language widely used on IBM mainframes across banking, ‌insurance and government systems. "Modernizing a COBOL system once required armies of consultants spending years mapping workflows. Tools like Claude Code can automate the exploration ⁠and ​analysis phases ⁠that consume most of the effort in COBOL modernization," Anthropic said in a ⁠blog post on Monday.

"With AI, teams can modernize their COBOL ​codebase in quarters instead of years," it added. Software stocks have ⁠been battered in recent months by market fears around the growing capabilities ⁠of ​AI tools, particularly following the launch of plug-ins from Anthropic's large language model Claude, seen as the startup's push ⁠to become an application layer.

Shares of cybersecurity companies including CrowdStrike and Datadog ⁠also slumped ⁠on Monday, as investors weighed the potential impact of Anthropic's new security tool on the industry.