AI Threatens Legacy Code Giants

IBM shares experienced a sharp 10% decline on Monday afternoon following Anthropic's announcement of Claude Code, an artificial intelligence tool aimed at streamlining COBOL code modernization. Major technology consulting firms Accenture and Cognizant Technology Solutions also saw their stock prices drop in the wake of this news.

These companies have substantial practices focused on modernizing legacy systems, including decades-old COBOL codebases. Anthropic's Claude Code promises to automate significant portions of the COBOL modernization process, a task that typically requires extensive human analysis and large consulting teams. The AI tool can map code dependencies, document workflows, and identify risks, potentially reducing modernization timelines from years to quarters.

COBOL continues to be a foundational language, powering an estimated 95% of ATM transactions in the United States and supporting critical infrastructure across finance, airlines, and government. However, the dwindling number of developers proficient in COBOL presents a growing challenge. Anthropic's innovation aims to address this by altering the economics of legacy code modernization, making it more cost-effective.

The company released a Code Modernization Playbook on February 23, 2026, alongside the Claude Code announcement. This tool is poised to reshape how organizations approach the essential but complex task of updating their vital legacy systems.