IBM stock fell 10% on Monday afternoon after Anthropic published a blog post about its Claude Code tool, which can modernize software written in the COBOL language. This development has significant implications for IBM, as many of the software systems used by the federal government, banks, and airlines are written in COBOL and run on IBM mainframes.
The COBOL language, developed 67 years ago, is still widely used for large-scale batch transactions, but modernizing it is a slow and expensive process due to the code’s complexity and lack of documentation. Anthropic claims that its Claude Code tool can simplify this process by uncovering and documenting workflows hidden within the code, identifying dependencies, and providing insights into system redesign. According to the company, “With AI, teams can modernize their COBOL codebase in quarters instead of years.” COBOL was developed in 1959 via a public-private partnership that included the Pentagon and IBM, but private-sector companies have largely moved away from it due to its difficulty and cost of maintenance.
The U.S. government continues to rely on COBOL-based mainframe systems to manage financial transactions, including tax payments and refunds, Social Security benefits, and Medicare reimbursements. Anthropic‘s announcement comes amidst a dispute between the company and the government over the use of its AI models for Pentagon use. Anthropic CEO Dario Amodei is expected to meet with Defense Secretary Pete Hegseth to discuss the company’s stance on providing AI for autonomous weapons or mass-surveillance systems. The impact of Anthropic‘s blog post on IBM‘s stock may be compounded by broader investor concerns about AI deployment and new global tariff announcements, which could affect tech companies and their supply chains. As a result, IBM‘s stock price may continue to be affected by the evolving landscape of AI technology and its potential to disrupt traditional industries.
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