Anthropic is a disruptor in the AI market, giving its fiercest rival, OpenAI, a run for its money. Lately, it secured $30 billion in Series G funding, pushing its post-money valuation to $380 billion. Anthropic’s flagship model, Claude, has been adopted by large organizations, becoming foundational AI plumbing for businesses.
Now, a single blog post has caused IBM’s stock to drop sharply. IBM shares declined 13% on Wall Street, wiping roughly $30 billion off its market value—and it didn’t even take the entirety of a single business day for it to happen.
The post stated that Claude can streamline COBOL code, a decades-old programming language still widely used in enterprise systems. For the uninitiated, the majority of banking, airline, and government systems still run on this code. So, let’s get into the nitty-gritty of the blog post and why it might spell doom for a company like IBM.
“COBOL modernization”: How does it affect IBM?
One blog post by Anthropic has caused IBM to suffer the worst single-day loss in 25 years. All the company stated in its blog post is that its core AI offering, Claude, can “automate the exploration and analysis phases that consume most of the effort in COBOL modernization.”
The blog post further highlighted that their AI model can “map dependencies across thousands of lines of code, document workflows, and identify risks that would take human analysts months to surface.”
Now, this revelation by the company makes the exclusivity of the coding language redundant. A system that required “armies of consultants” who spend years “mapping workflows”, resulting in large timelines and high costs, will now be streamlined and automated by Claude.
Notably, this was a language taught at only a handful of universities, and it is hard to find engineers who can read this code. Now, IBM’s major revenue stream is helping these huge enterprises run and modernize COBOL systems, and the threat of automation of that work by Claude has hit the company’s bread and butter.
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As one X user highlighted, “IBM’s moat was never the technology. It was the fact that nobody else could understand it. Entire consulting empires existed because the code was too old, too tangled, and too critical to touch. Companies paid IBM billions because the alternative was catastrophic system failure.”
“The priesthood just lost its monopoly on the sacred language,” the user added.
Anthropic is penetrating deeply into enterprise infrastructure, modernizing it, and helping them cut costs by reducing dependencies on legacy consultancy companies. It remains to be seen how IBM reacts to AI taking up its targeted services. But at the moment, one thing is clear: either get with the AI revolution or watch yourself die out.
