What happened
IBM shares plunged 13% on February 23, marking their largest one-day percentage loss since October 2000, and are down 27% for February, the biggest monthly decline since at least 1968. This followed Anthropic's announcement that its Claude Code tool can modernise COBOL, a dated programming language predominantly run on IBM mainframes. Anthropic stated Claude Code automates the "exploration and analysis phases" of COBOL system modernisation, tasks previously requiring extensive consultant effort.
Why it matters
AI's ability to automate complex, human-intensive tasks directly impacts the valuation of legacy technology providers. For investors and procurement teams, this demonstrates how AI tools like Claude Code can reduce demand for traditional consulting services and proprietary systems, shifting unit economics for mainframe-dependent businesses. Platform architects managing critical infrastructure must now factor in accelerated AI-driven modernisation pathways.
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