The stock price of the tech giant International Business Machines Corp (IBM) crashed to its lowest in years after the maker of the large language models (LLM) Claude unveiled another disruptive AI tool for the COBOL (Common Business-Oriented Language) system.
Modernizing the Cobol System using AI
The share price of IBM plunged to a record low on Monday after the American AI safety and research company Anthropic announced an update that can help reduce the cost of the COBOL system, which handles around 95% of ATM transactions in the US.
“Modernizing a COBOL system once required armies of consultants spending years mapping workflows. This resulted in large timelines and high costs that few were willing to take on. AI changes this,” IBM said in a statement. “Tools like Claude Code can automate the exploration and analysis phases that consume most of the effort in COBOL modernization.”
Driving AI Fears
According to Anthropic, the tool can identify risks that would take human analysts months to determine along with other capabilities.
“Tools like Claude Code can automate the exploration and analysis phases that consume most of the effort in COBOL modernization,” Anthropic said. “AI makes the economics work by automating what used to require armies of consultants, freeing your engineers to make the migration decisions that require their domain expertise.”
The development is further driving the AI fear that already affects the tech sector and causing selloff in the equities market. The tool also threatens the core businesses of IBM, the maker of most of the mainframe computers that run COBOL.
Following Anthropic’s announcement, IBM’s share dropped down to $223.35, representing a decline of 13.15%, from the previous $257.16. The drop on Monday marks the share’s biggest one-day drop since 2000.
