IBM shares plunge 13% as Anthropic's AI tool threatens decades-old COBOL modernization business

Anthropic touts AI for COBOL, IBM stock takes a hit

IBM's share price slumped by 13 percent on Monday, seemingly caused by investors reacting to an Anthropic blog post that points out its Claude Code tools can accelerate refactoring of apps written in the ancient COBOL language. Anthropic's post points out that COBOL applications remain prevalent and often handle critical applications for governments, airlines, and financial institutions. The AI upstart also noted that COBOL-proficient programmers are hard to find, that attempts to train more of them have not grown the population, and that migrating from COBOL is therefore risky and expensive. And then, because vibe coding tool Claude Code is Anthropic's hammer and any software development problem looks like a nail, the company suggested using AI to help rewrite COBOL apps. "AI can assess which components are safe to move and which need careful handling," Anthropic suggests. "Areas with accumulated technical debt get documented before they become migration surprises." Anthropic's post comes about three years after IBM itself suggested using AI to rewrite COBOL as Java using its own watsonx Code Assistant for Z. Indeed, the perils and opportunities presented by COBOL migrations, and the potential for AI to accelerate refactoring of legacy apps, are not new to the technical community. Just last week, Infosys chairman Nandan Nilekani said the rise of AI means the cost of rewriting legacy apps has become affordable and made such moves imperative. In recent years, we've also reported mainframe migration initiatives from AWS, Microsoft and IBM spin-out Kyndryl, and NTT. All that activity didn't dent IBM's mainframe business: Last month, Big Blue reported its highest mainframe revenue for 20 years, and CEO Arvind Krishna attributed that in part to the same AI code conversion tools Big Blue spruiked in 2023. Krishna also said mainframes still offer the lowest operating cost for some workloads. Still, COBOL remains a drag on many organizations: The UK government last year bemoaned the big bills it pays to keep creaky COBOL code from crashing. IBM's share price dive came amid speculation that AI will ruin SaaS companies' business models, an idea that is thought to be behind substantial share price decreases for the likes of Salesforce, Atlassian, Adobe, ServiceNow, and HubSpot. So thanks, Anthropic, for your contribution to the long tradition of COBOL FUD, because if nothing else your post has shown AI has the power to wake people up to old and well-known risks associated with legacy tech. ®

IBM Shares Plunge as Anthropic Touts COBOL Modernization Efforts

International Business Machines Corp. shares plunged on Monday, after the artificial intelligence startup Anthropic said its Claude Code tool can help with modernizing COBOL, a dated programming language that's mainly run on IBM computers. Shares sank 13% in their biggest one-day percentage loss since October 2000. With the decline, the stock is now down 27% in February, on track for its biggest one-month percentage decline since at least 1968, according to data compiled by Bloomberg. "Modernizing a COBOL system once required armies of consultants spending years mapping workflows" but "tools like Claude Code can automate the exploration and analysis phases that consume most of the effort in COBOL modernization," Anthropic wrote in a blog post. Most of the mainframe computers that run COBOL are made by IBM, and the selloff made the company the latest to see heavy selling pressure on the fear that AI will weigh on the growth prospects of legacy companies. A significant chunk of IBM's business remains tied to its mainframe business. These massive customer-owned servers run applications on COBOL, an older coding language than those in common in the rest of the technology industry. Mainframes are common among customers with high reliability needs, such as finance or government. On Friday, Anthropic introduced a new security feature into its Claude AI model, spurring widespread selling of cybersecurity stocks. Software stocks have been broadly weaker this year on concerns over AI-related disruption; a major software ETF is down 27% this year, on track for its biggest one-quarter drop since the financial crisis in 2008. Much of the selling has come on new AI tools released by companies like Anthropic, OpenAI, and Alphabet Inc. Investors are fretting that the ability to "vibe code" -- use AI to write software code -- will allow users to create their own applications, diminishing demand for legacy products, weighing on companies' growth, margins, and pricing power. Read also: Traders Left With 'Unscratchable Itch' for Anthropic Exposure

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

Feb 23 (Reuters) - Shares of International Business Machines (IBM.N), opens new tab 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, opens new tab 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 (CRWD.O), opens new tab and Datadog (DDOG.O), opens new tab also slumped on Monday, as investors weighed the potential impact of Anthropic's new security tool on the industry. Reporting by Chris Thomas in Mexico City; Editing by Janane Venkatraman Our Standards: The Thomson Reuters Trust Principles., opens new tab

IBM is the latest AI casualty. Shares are tanking 11% on Anthropic programming language threat

International Business Machines Corp. (IBM) signage on the floor of the New York Stock Exchange (NYSE) in New York, US, on Monday, Dec. 8, 2025. International Business Machines stock is getting slammed, becoming the latest victim of rapidly developing AI technology, after Anthropic's Claude announced COBOL capabilities. Shares of IBM fell 11% in Monday afternoon trading after Anthropic outlined a new use case for its Claude Code product: automating the exploration and analysis work that drives most of the complexity in COBOL modernization. COBOL is a programming language used widely in business data processing, which is a core business area for IBM. COBOL, short for Common Business-Oriented Language, was developed in the 1950s and continues to powers systems responsible for large volumes of transactions, including payment processing and retail transaction systems. In a Monday blog post, Anthropic wrote that COBOL handles an estimated 95% of ATM transactions in the U.S. "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 Anthropic blog post reads. "Legacy code modernization stalled for years because understanding legacy code cost more than rewriting it. AI flips that equation," the post continued. It then explained that Claude Code can help modernize COBOL codebases by mapping dependencies across thousands of lines of code, documenting workflows and identifying risks that "would take human analysts months to surface." Monday's move brought IBM shares down nearly 22% year to date.

IBM stock crash: How a single blog post wiped $30 billion off IBM's market value in one afternoon - here's what rattled investors

IBM stock crash shocked Wall Street. IBM shares fell 13% in one day. Nearly $30 billion in market value vanished. This was IBM's worst drop since 2000. The trigger was not earnings. It was an AI blog post by Anthropic. The post introduced a COBOL modernization AI tool. Investors fear AI disruption in legacy systems. IBM mainframe revenue now faces pressure. Markets repriced risk instantly. IBM stock crash: IBM stock plunged 13.2% in a single session -- its steepest daily drop since October 18, 2000 -- after Anthropic said its AI tool could modernize COBOL systems running on IBM mainframes. The sharp selloff erased billions in market value and sent shockwaves across the broader software and cybersecurity sector. Investors reacted swiftly after Anthropic announced that its Claude Code platform can automate large parts of COBOL modernization, a task historically dominated by IBM consultants. The market interpreted the announcement as a potential threat to IBM's lucrative legacy modernization and mainframe services business. COBOL, a decades-old programming language, remains deeply embedded across banking, insurance, and government infrastructure -- much of it running on IBM systems. If AI significantly reduces the time and cost required to update these systems, it could reshape enterprise IT spending patterns. Shares of IBM closed down 13.2%, marking the company's worst daily performance in more than 25 years. Meanwhile, cybersecurity and cloud stocks such as CrowdStrike and Datadog also declined as investors reassessed how generative AI tools might disrupt established software providers. The immediate trigger was Anthropic's blog post stating that its Claude Code tool can automate "the exploration and analysis phases that consume most of the effort in COBOL modernization." Traditionally, upgrading COBOL systems required years of manual code review, workflow mapping, compliance validation, and migration planning. COBOL -- short for Common Business-Oriented Language -- powers core transaction systems at global banks, insurance companies, and federal agencies. Industry estimates suggest that hundreds of billions of lines of COBOL code remain active worldwide. A significant portion runs on IBM mainframes. Historically, modernization projects involved large consulting teams and multi-year contracts. These engagements generated steady revenue streams for IBM's Global Technology Services division. If AI tools reduce project timelines from years to quarters, as Anthropic claims, enterprise clients may reconsider long-term consulting arrangements. That possibility rattled investors. IBM remains a dominant player in enterprise mainframe systems. Its zSeries systems power large banks, insurers, airlines, and government agencies. These clients rely on mission-critical COBOL applications that cannot fail. IBM generates revenue from hardware, software subscriptions, and consulting tied to these systems. Mainframe refresh cycles historically support predictable income streams. Consulting modernization projects generate additional margins. However, artificial intelligence now threatens the labor-intensive portion of this model. If AI reduces dependency on expensive consulting teams, pricing power could weaken. Even modest margin compression can impact valuation significantly for a company of IBM's size. Before the sell-off, IBM's market capitalization hovered above $230 billion. A 13% drop erased roughly $30 billion in hours. That scale shows how seriously markets take AI disruption risk. IBM's mainframe ecosystem is deeply entrenched in regulated industries. Banks rely on IBM zSystems for high-volume transaction processing. Insurance firms use COBOL applications to manage policy administration and claims. Government systems also depend on legacy infrastructure for stability and compliance. Modernizing COBOL is complex because the code often lacks documentation. Developers must understand decades-old logic before migrating workloads to modern cloud-native platforms. This process is time-consuming and expensive. Anthropic's Claude Code aims to accelerate that discovery phase using generative AI. By analyzing legacy codebases, the tool can reportedly identify dependencies, map workflows, and suggest modernization pathways. If effective at scale, such automation could compress consulting timelines. That creates competitive pressure on IBM's services margins. While IBM itself invests heavily in AI, including its watsonx platform, investors worry about near-term disruption to legacy revenue streams. The selloff extended beyond IBM. Shares of CrowdStrike and Datadog fell as traders weighed the impact of Anthropic's new AI-powered security tools. Investors increasingly question whether generative AI platforms could replace parts of traditional cybersecurity and monitoring software stacks. Software stocks have faced volatility in recent months due to rapid advances in large language models. Anthropic's expansion of Claude with plug-ins and developer tools signals its ambition to move beyond foundational models and into the application layer. That shift intensifies competition across enterprise software markets. Despite being introduced in 1959, COBOL remains mission-critical. Financial institutions process trillions of dollars daily through COBOL-based systems. Many of these applications run on IBM mainframes because of their reliability and processing power. However, the workforce skilled in COBOL continues to shrink as experienced programmers retire. That talent gap has increased pressure on organizations to modernize systems. AI-assisted code transformation could address both cost and workforce constraints. By automating documentation and translation tasks, tools like Claude Code may help organizations transition from legacy environments to cloud platforms faster. Still, experts caution that full modernization involves regulatory testing, integration validation, and risk management -- areas where human oversight remains essential. While the immediate market reaction punished IBM stock, some analysts argue the threat may be overstated. Large enterprises move cautiously, especially in banking and government sectors where downtime carries massive financial and reputational risks. IBM is not a passive player in AI. The company has invested heavily in AI platforms, hybrid cloud solutions, and enterprise automation tools. It markets AI-powered offerings under its Watson and cloud ecosystem. However, perception matters in financial markets. If investors believe IBM could lose share in legacy modernization, valuation multiples compress. The broader question for investors is how generative AI reshapes enterprise IT spending. Will AI reduce service revenue? Or will it expand modernization demand by lowering entry barriers? That debate is likely to continue. 1. Why did IBM stock drop 13% today? IBM stock fell 13.2% in one trading session, marking its steepest daily decline since October 18, 2000. The selloff followed an announcement from Anthropic that its AI tool, Claude Code, can automate large portions of COBOL modernization on IBM mainframes. Investors fear this could reduce demand for IBM's high-margin consulting and legacy system services. The market reacted to potential revenue compression, not an immediate earnings cut. 2. How does Anthropic's AI threaten IBM's mainframe business? Hundreds of billions of lines of COBOL code still run global banking, insurance, and government systems -- much of it on IBM infrastructure. Traditionally, modernization projects took years and required large consulting teams. Anthropic claims AI can compress that timeline to quarters. If true, this reduces billable hours and long-term contracts, directly pressuring IBM's services revenue model. 3. Is COBOL modernization really a multi-billion-dollar market? COBOL remains embedded in critical financial systems that process trillions of dollars daily. Large banks and federal agencies depend on it for core operations. Modernization projects often run into tens or hundreds of millions per institution due to complexity, compliance testing, and integration risk. That scale explains why any AI tool promising faster, cheaper upgrades immediately impacts investor expectations. 4. Will AI replace IBM consulting services? IBM shares dropped 13.2% in a single day, but that does not confirm permanent displacement. Enterprise IT transitions in regulated sectors move slowly and require compliance audits, risk testing, and human oversight. AI may automate code analysis, yet implementation, governance, and integration still demand expertise. The near-term risk is margin compression, not instant obsolescence. (You can now subscribe to our Economic Times WhatsApp channel)

IBM Stock Is Trending After Crating 13% And Claude-Maker Anthropic Is The Reason Why: Here's What Happened - IBM (NYSE:IBM)

On Monday, shares of International Business Machines Corp (NYSE:IBM) declined 13.18% in the regular session to $223.35 and gained 0.94% in after-hours trading. The stock was seen trending overnight. The stock became the latest perceived victim of rapidly advancing AI technology. AI Tool Targets COBOL Modernization The move followed comments from Anthropic that its Claude Code tool can help companies modernize legacy systems built on COBOL. Common Business-Oriented Language, or COBOL, is a programming language widely used in banking, government and large-scale transaction processing. IBM has long generated revenue from mainframe systems and consulting services tied to maintaining and upgrading those environments. Developed in the late 1950s, it still underpins a vast share of financial infrastructure. "COBOL is everywhere. It handles an estimated 95% of ATM transactions in the U.S.," Anthropic wrote in a blog post. However, maintaining and rewriting those systems has been costly and time-consuming. Investors Fear AI Could Pressure IBM's Core Business Anthropic said Claude Code can map dependencies, document workflows and identify risks across massive codebases -- tasks that once required months of manual analysis. The company argued that AI can make legacy modernization faster and more cost-effective. Ohanian Reacts To Claude Code Technology investor Alexis Ohanian weighed in on social media, suggesting AI is accelerating software development to the point where building is no longer the bottleneck -- vision and execution are. "Claude just commoditized the act of building software -- now it's not eating the world, it's swallowing it whole," Ohanian wrote. IBM Earnings Strong, Stock Slides 14% Year Over Year Last month, IBM reported fourth-quarter revenue of $19.69 billion, surpassing the consensus estimate of $19.23 billion, according to Benzinga Pro. The company also reported adjusted earnings of $4.52 per share, exceeding analysts' expectations of $4.32 per share. In the past 12 months, IBM shares have been down 14.71%, whereas in the past five years, it has gained 96.61%, according to Benzinga Pro. The company currently has a market capitalization of $208.77 billion. IBM stock shows a negative price trend across the short, medium and long term, along with a weak value rating. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo: nitpicker / Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Explained: How IBM's 13% plunge on Anthropic's COBOL disruption fears sparked bloodbath in TCS, Infosys, Wipro & other IT stocks

IT stocks slumped on February 24, falling up to 8%, after IBM plunged 13% on Wall Street -- its worst drop in 25 years -- amid concerns that Anthropic's Claude AI tool could streamline COBOL code and disrupt IBM's legacy business. The weakness spilled over to Indian IT names. Shares of major information technology companies came under pressure on February 24, falling as much as 8%, after a sharp decline in IBM on Wall Street unsettled investors. The stock tumbled 13%, its worst single-day fall in 25 years, after AI startup Anthropic said that its Claude tool can help streamline COBOL code. COBOL, short for Common Business-Oriented Language, is widely used in business data processing and continues to power critical systems across banks, governments and airlines on IBM mainframes. The development raised concerns about potential disruption to IBM's core revenue streams, sending the stock to its worst single-day decline since October 2000. The sentiment spilled over into Indian IT stocks. Coforge, Persistent Systems and HCLTech led the losses with declines of about 7-8%. Shares of Infosys, Tech Mahindra, Mphasis and Tata Consultancy Services fell roughly 4-6%. The Nifty IT index tanked a staggering 6% on Tuesday. COBOL remains an important technology for many Indian IT firms, particularly those supporting global banking, insurance and retail infrastructure. TCS is among the largest employers for mainframe and COBOL-related roles in India, largely for international banking clients. Infosys also hires mainframe developers and system programmers for COBOL-based systems, while Wipro uses the language across several consulting and IT services engagements. Coforge similarly focuses on COBOL in parts of its specialised services portfolio. In a blog post on Monday, Anthropic said modernising COBOL systems traditionally required large teams 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," the company said, adding that with AI, teams could modernise COBOL codebases in quarters rather than years. Anthropic claimed that AI excels at streamlining tasks that once made COBOL modernisation cost-prohibitive. "With it, your team can focus on strategy, risk assessment, and business logic while AI automates the code analysis and implementation," it said. The company claimed that the approach taken by AI can work for COBOL systems of any size. "Tools like Claude Code can automate much of the exploration and analysis work described, giving your team the comprehensive understanding they need to plan and execute migrations confidently," it said. Further, fresh concerns have also surfaced about AI's potential to reshape the cybersecurity industry. Tuesday's sharp decline in cybersecurity stocks reflected those fears, as investors assessed the possible impact of a new security tool launched by Anthropic. In today's session, several cybersecurity and technology stocks came under sharp selling pressure, with some falling as much as 20%. TAC Infosec was among the worst hit, hitting a 20% lower circuit at Rs 415.70 on the NSE. TechD Cybersecurity dropped more than 14%, while Sattrix Information Security declined 5%. Exato Technologies slipped 3%. Among other stocks, Sasken Technologies fell up to 3.2% to its day's low of Rs 1,155 per share on the BSE Limited. Quick Heal Technologies declined more than 3%, while Expleo Solutions dropped nearly 5% to its intraday low of Rs 791 per share. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)

Anthropic's offer to modernize COBOL using AI triggers double-digit slide for IBM

In another wake-up call for established IT firms, IBM witnessed a 13% decline in share price on Monday after Anthropic announced that Claude Code can modernize COBOL programming language, which runs on IBM systems. According to some estimates, this is the steepest hit IBM has taken at the stock market since 2000. "Legacy code modernization stalled for years because understanding legacy code cost more than rewriting it. AI flips that equation," Anthropic said in a blog post on February 23. Despite growing cloud adoption and proliferation of software written on modern programming languages such as Python, Java, JavaScript, and frameworks like React or Node.js, traditional programming languages such as COBOL are still widely used in banking, insurance and government agencies for data processing. COBOL was originally designed for mainframe computers provided by firms like IBM. One of the reasons why many legacy enterprises still use it is that its code is written like one large block with a long list of instructions that cannot be skipped. This makes it difficult to change or upgrade them. Despite its limitations, COBOL has proven to be highly reliable and secure. In sectors like BFSI, the operational risks of migrating away from a stable system like this is considered too high as these systems still handle billions of transactions. According to Anthropic, modernizing COBOL systems required an army of consultants and years of mapping workflows, which led to long timelines and high cost. However, with tools GenAI tools like Claude Code COBOL codebases can be modernized in a few quarters instead of years, the UK based firm claims. Software stocks took a major hit early this month after Anthropic added specialized plugins in Claude Cowork for legal, sales, finance, and marketing professionals. The release triggered an investor panic amid concerns that these AI tools could bypass traditional software. IT and SaaS companies reportedly lost $285 billion in market value. Indian IT firms, including Infosys and Mphasis, saw a slide of over 7%, while shares of Coforge, TCS and HCL Tech dropped between 5% and 7%. Among global forms, Thomson Reuters shares fell by as much as 18% as Anthropic's new tools threaten its subsidiary, Westlaw, which provides legal research services. In Reuters's case, the investor sell-off was motivated by concerns that Claude Cowork-like tools would reduce dependence on traditional platforms such as Westlaw or Practical Law, as corporate legal teams can now complete their tasks using AI. Further, Anthropic recognizes in the blog post that COBOL modernization is risky, while stressing that automated discovery can help in finding hidden links and risks that can cause problems during migration. The firm explains that AI will start by going through the entire COBOL codebase and mapping its structure. It will trace how data moves through a system and create diagrams and written descriptions of processing pipelines. This would allow AI to identify the components that are safe to migrate and those that are too risky to modernize. The latest GenAI tools offer longer context windows with over a million tokens and have better agentic capabilities, which allow them to plan and execute tasks involving multiple steps. This makes them capable of analyzing large codebases with decades of legacy code and fixing bugs in complex systems.

IBM shares sink 13%, record steepest drop in 25 years after Anthropic says AI can modernise COBOL

Shares of International Business Machines (IBM) plunged more than 13% on Monday to record their steepest single-day drop in more than 25 years on Monday. This came after AI startup Anthropic said its Claude Code tool could be used to modernise a legacy programming language which runs on IBM systems. IBM shares sank 13.2% to close at $223.35, marking their biggest single-day drop since October 18, 2000. Also read: Infosys, HCL Tech, TCS, other IT stocks fall up to 3% as Anthropic delivers new shock COBOL is a programming language widely used on IBM mainframes across banking, insurance and government systems. According to Anthropic, COBOL handles around 95% of ATM transactions in the US. However, it added that the number of people who understand the language keeps shrinking every year. "Modernising 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 modernisation," Anthropic said in a blog post on Monday. "With AI, teams can modernise their COBOL codebase in quarters instead of years," it added. IT stocks globally have fallen sharply in recent weeks amid market fears around AI-led disruption in the sector. In the Indian market, the Nifty IT index declined more than 3% today, and over 20% in one month. The massive selloff began earlier this year when Anthropic launched plug-ins for its Claude Cowork agent, which could automate tasks across legal, sales, marketing and data analysis departments. Coforge and Persistent Systems shares declined more than 5% each today, while heavyweights Infosys, HCL Technologies, TCS and others fell up to 4% after Anthropic's comments on COBOL. Also read : US Stocks | AI disruption fears stall debt deals, adding pressure on US software stocks Shares of cybersecurity companies, including CrowdStrike and Datadog, also declined on Monday, as investors weighed the potential impact of Anthropic's new security tool on the industry. (With inputs from Reuters) (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Infosys, Wipro, other IT stocks in focus as Anthropic delivers new shock; ADRs tumble up to 5%

Shares of information technology (IT) companies such as Tata Consultancy Services, Wipro and Infosys, among others, could face heavy selling pressure in Tuesday's trade after Anthropic said its Claude Code tool can be used to modernise legacy systems that run on COBOL. Infosys and Wipro US-listed shares tumbled up to 5% overnight. Anthropic on Monday said Claude Code could automate much of the exploration and analysis that drives the complexity of COBOL modernisation, a key business area for IBM. IBM has long sold mainframe systems optimised for large-scale transaction processing, where COBOL is widely used. Short for Common Business-Oriented Language, COBOL is a dominant programming system developed in the late 1950s and is commonly used in business data processing, including payment processing and retail transaction systems. According to Anthropic, an estimated 95% of ATM transactions in the US still rely on COBOL, making it a potential target for cost-efficient AI disruption. Sensex, Nifty today: Catch all the LIVE stock market action here "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," Anthropic said in its latest blog post. Selling pressure in IT stocks had already begun earlier this month after Anthropic unveiled a new AI product designed to automate a wide range of professional tasks, reigniting concerns that artificial intelligence could erode the profitability and competitive moats of traditional IT services companies. The company, which develops the Claude chatbot, said the product can automate several legal functions, including contract reviews, non-disclosure agreement triage, compliance workflows, legal brief preparation and standardised responses. Also Read | Investing Rs 95,000 a month through mutual fund SIPs - Can it build a Rs 5 crore corpus in 15 years? At the centre of the market reaction is growing concern that AI could fundamentally reshape the competitive landscape for software and IT services firms, potentially weakening both profitability and market positioning. Industries once considered relatively insulated from AI disruption, including legal services, data analytics and customer support, are now increasingly in focus. If AI is able to automate these functions, the large IT services industry built around delivering them could face significant challenges. (Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. These do not represent the views of The Economic Times.) (You can now subscribe to our ETMarkets WhatsApp channel)

IBM stock falls 10% after Anthropic launches AI tool to modernize COBOL code

IBM's stock price suddenly fell by more than 10% on Monday afternoon after a big AI announcement shocked the market. The fall happened right after AI company Anthropic revealed a new tool that can help modernize old COBOL computer code faster. The news was first highlighted in a post on X by The Kobeissi Letter, which said this shows how important and fast-changing the current tech era is. After this announcement, shares of Accenture and Cognizant Technology Solutions also went down. These companies were already trading lower because the overall tech sector was weak that day. IBM, Accenture, and Cognizant earn a lot of money by helping businesses update very old computer systems written in COBOL, as per the report by Investing.com. Anthropic's new AI tool can automate the early stages of updating COBOL systems, work that normally needs big consulting teams. The AI can quickly scan thousands of lines of old code, map how they connect, explain workflows, and find risks. This type of work usually takes human experts many months to complete. COBOL is still very important today -- it handles about 95% of ATM transactions in the United States. Hundreds of billions of lines of COBOL code still run daily in banks, airlines, and government systems. But the number of programmers who understand COBOL is falling because most original developers have retired. Anthropic said its AI tool can help modernize these systems in months instead of years. The tool can find program entry points, track how the code runs, map data movement, and document connections between files, as noted by Investing.com. The company explained that in the past, modernization projects got stuck because understanding old code was more expensive than rewriting it. Anthropic said AI now changes this situation by making code analysis much faster and cheaper. Along with the announcement, the company released a "Code Modernization Playbook" on February 23, 2026. Q1. Why did IBM stock fall suddenly? IBM stock fell after Anthropic announced a new AI tool that can quickly update old COBOL computer systems, which may reduce the need for consulting services. Q2. What does Anthropic's new AI tool do? The AI tool helps companies understand and modernize old COBOL code much faster by automatically analyzing, mapping, and documenting the system.

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

Feb 23 (Reuters) - 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. (Reporting by Chris Thomas in Mexico City; Editing by Janane Venkatraman)