Explained | What is COBOL? How an Anthropic Claude blog wiped $30 billion off IBM in a single session

A single blog post from Anthropic wiped over $30 billion off IBM's market value in a single session. Why, you may ask? Well, it's all linked to a programming language called COBOL, which has been central to IBM's operations for over 60 years. So what exactly is COBOL, and what did Anthropic say to stir panic among investors? Let's find out below.

What is COBOL?

COBOL, which stands for Common Business-Oriented Language, is a programming language created in 1959 which is still widely used for business and financial data processing. The language was created by a consortium called the Conference on Data Systems Languages (CODASYL), with the first version coming out in 1960.

The language was meant to serve as a stopgap solution, but the US Department of Defence quickly realised its usefulness and mandated computer manufacturers to offer it.

Despite over 65 years of existence, COBOL has remained popular and, according to an IBM blog post, supports 80% of in-person credit card transactions and 95% of all ATM transactions, while generating over $3 billion in commerce each day.

According to the company, an estimated 250 billion lines of COBOL code are in production use across sectors such as financial services, government, logistics, manufacturing and retail.

However, IBM admits in the same blog post that the number of professionals skilled in COBOL is dwindling and many COBOL specialists are retiring, while current software developers have been trained on modern languages.

Moreover, older COBOL systems may not always meet modern security and regulatory requirements. There are also issues with integrating older COBOL apps with modern cloud platforms and software stacks.

What did Anthropic say?

In a blog post on Monday, Anthropic talked about the enduring relevance of COBOL across critical systems in finance, airlines and government. The company also discussed the shrinking number of people who understand COBOL and the minuscule replacement rates for the language.

“Modernising a COBOL system once required armies of consultants spending years mapping workflows. This resulted in large timelines and high costs that few were willing to take on,” Anthropic wrote in a blog post.

The company, however, states that modern AI tools like Claude Code can ‘automate the exploration and analysis phases’ which consume most of the time in COBOL modernisation.

According to Anthropic, AI systems can map dependencies across large codebases, document workflows, identify risks, and surface opportunities for refactoring, helping teams better understand legacy systems before attempting migration.

“With AI, teams can modernise their COBOL codebase in quarters instead of years,” Anthropic claimed.

“AI excels at streamlining the tasks that once made COBOL modernisation cost-prohibitive. With it, your team can focus on strategy, risk assessment, and business logic while AI automates the code analysis and implementation,” the company added.

Shortly after the blog post, IBM shares had their worst day in the market in over 25 years, with the company posting a 13.2% decline. As per Bloomberg data, IBM shares have fallen 27% in February and are on track for their biggest one-month decline since at least 1968.

The wipe-off was triggered by investor fears that if AI could automate the work that previously required years of consulting, it could adversely affect IBM's revenue streams.

However, IBM defended its position in a blog post where the company's Senior Vice President and Chief Commercial Officer, Rob Thomas, wrote, “The value IBM mainframe delivers has nothing to do with COBOL. It has to do with what the platform is: a purpose-built architecture from silicon through the operating system for unmatched transactional resilience, security, performance, and efficiency at scale that no other distributed environment has been able to deliver.”