The AI-driven software sell-off that devastated markets in early February is far from over, with IBM shares plummeting on Monday after Anthropic announced another disruptive AI tool.
IBM shares fell 13% after the maker of the Claude AI chatbot announced new tools. In this case, the startup announced an update that will help reduce costs for COBOL (Common Business Oriented Language) systems used by many companies.
The term may not be well-known outside the software industry, but IBM’s stock plummeted rapidly during this software crash.
Anthropic announced this update in a blog post explaining why COBOL is important and why people outside the technical community should care.
“COBOL is everywhere. COBOL processes estimates. 95% of US ATM transactions“Hundreds of billions of lines of COBOL run in production every day, powering critical systems in finance, airlines, and government.” Yet, the number of people who understand it is decreasing every year. ”
The company said its new tool can “identify risks that would otherwise take months for a human analyst to surface.” New AI use cases pose a potential threat to the types of business data services that form the core of IBM’s business.
The company says Claude allows companies to streamline their COBOL operations at a fraction of the cost, similar to the legal plug-in the company introduced earlier this month that led to its initial software sale.
“Modernizing legacy code has been stagnant for years because understanding legacy code is more expensive than rewriting it. AI has flipped that equation on its head,” Anthropic said in a post.
Tech stocks initially rallied after the release of Anthropic’s legal plug-in surprised Wall Street and caused investors to rush to limit their exposure to legal technology, but the market plunged again on Monday.
Even before the Anthropic news affected IBM stock, the sector had fallen earlier in the session as investors reacted to reports circulating online speculating about tariff uncertainty and broader negative effects of AI.
