IBM shares plummet 13% after Anthropic COBOL announcement (www.forbes.com.au)

IBM shares saw a dramatic decline of 13.1% on Monday, marking their largest single-day loss since the dot-com bubble, following Anthropic's announcement of an AI tool aimed at modernizing COBOL, a programming language that still powers vital financial infrastructure. Anthropic's Claude Code tool targets the significant challenge of maintaining legacy systems, as COBOL, which processes 95% of U.S. ATM transactions and manages Social Security payments, suffers from a dwindling number of engineers skilled in the language. This development has raised concerns within the tech industry regarding the future of traditional software providers like IBM, which has deep roots in COBOL. The implications of Anthropic's announcement ripple beyond IBM's stock price, as it underscores an accelerating shift towards AI-driven solutions for legacy systems. With "hundreds of billions" of lines of COBOL in production, Anthropic argues that AI could bridge the gap as the supply of knowledgeable COBOL engineers diminishes. This trend contributes to a broader narrative of AI's potential to disrupt various sectors, leading to stock sell-offs in software and cybersecurity industries. Despite concerns, some analysts caution that market reactions may be overstated and suggest that AI advancements could ultimately enhance productivity across businesses, rather than diminish them.