IBM is bleeding value today, with shares plummeting 11% as investors wake up to an existential threat from an unexpected source. Anthropic, the AI startup behind Claude, is apparently making moves into COBOL and legacy systems territory - IBM's bread-and-butter mainframe business that's kept the 112-year-old tech giant afloat. The market's reaction is brutal and immediate, wiping billions off IBM's market cap as Wall Street realizes AI might finally kill off the last profitable corner of Big Blue's empire.
IBM is having a nightmare Monday. Shares of the century-old tech giant are down 11% after reports emerged that Anthropic is positioning itself to disrupt one of IBM's most profitable franchises - the COBOL programming language and mainframe systems that still run much of the world's critical business infrastructure.
The market's reaction tells you everything about how vulnerable IBM's core business has become. COBOL, that ancient programming language your parents' generation learned in college, still processes an estimated 95% of ATM transactions and 80% of in-person transactions globally. IBM has been the dominant player in maintaining, modernizing, and supporting these systems for decades. It's not sexy, but it's been steady cash.
Now Anthropic is apparently coming for that lunch money. While details remain scarce, the threat is clear enough to send institutional investors running. The timing couldn't be worse for IBM, which has spent years trying to reinvent itself as an AI and hybrid cloud company while still relying on its legacy mainframe business to fund that transformation.
Here's the thing - COBOL isn't just any old programming language. It was designed in 1959 for business data processing, and it's so deeply embedded in financial services, insurance, and government systems that replacing it has always seemed impossible. Banks have millions of lines of COBOL code running their core operations. The cost and risk of ripping that out has kept IBM's consulting and mainframe divisions profitable even as the rest of its business struggled.
But AI changes the equation entirely. If Anthropic's Claude or other large language models can understand, maintain, modernize, or even replace COBOL systems, the entire economic moat around IBM's mainframe business evaporates. Companies wouldn't need armies of expensive COBOL programmers or IBM consultants. They could use AI to manage legacy systems or migrate to modern architectures.
