The sell-off in the software sector triggered by artificial intelligence continues. On Monday, IBM Corp (IBM.US) shares experienced a sharp decline after AI startup Anthropic released another tool viewed by the market as "disruptive," further intensifying investor concerns over traditional software business models. IBM's stock plummeted over 13% during the session, closing at $223.35.
The sell-off followed Anthropic's announcement of an update to its Claude AI system, introducing a new feature designed to significantly reduce the costs associated with maintaining and analyzing COBOL systems. COBOL (Common Business-Oriented Language), while not widely known to the general public, has long been extensively used in critical systems for banking, aviation, and government agencies. It forms a significant part of the foundation for IBM's enterprise-level services.
In a blog post, Anthropic emphasized that COBOL is "ubiquitous" in the real world, noting that approximately 95% of ATM transactions in the United States rely on the language. Hundreds of billions of lines of COBOL code support core financial, aviation, and government systems daily in production environments. However, the pool of professionals who truly understand and can maintain this type of code is shrinking each year.
The company stated that Claude's new tool can automatically identify potential risks, issues that "could take months to uncover through manual analysis." Anthropic argues that AI enables companies to analyze and optimize COBOL systems at a fraction of the previous cost, thereby substantially reducing reliance on traditional IT services and consulting.
Market concerns center on the possibility that such AI applications could directly impact the legacy system maintenance, data services, and consulting businesses that companies like IBM have long depended on. Anthropic explicitly stated in its blog that progress in modernizing legacy code has been slow over the years because "the cost of understanding old code often exceeds the cost of rewriting it from scratch," and AI is now "fundamentally altering this cost structure."
Earlier this month, Anthropic's release of an AI plugin targeted at the legal industry had already prompted concentrated selling of legal technology and software stocks on Wall Street. Although tech stocks rebounded subsequently, Monday's renewed market pressure indicates that investor worries about AI's persistent erosion of traditional software profit models have not dissipated.
Beyond the news from Anthropic, the software and technology sectors already showed weakness early in the trading session. The three major U.S. stock indices closed lower on Monday, with the technology sector broadly declining. Analysts point out that as AI tools increasingly penetrate enterprise core systems, the market is reassessing the long-term competitive advantages, or "moats," of traditional software and IT services companies. The sharp drop in IBM's share price may be just another example in this wave of AI-driven adjustment within the software sector.