COBOL modernisation just got an AI shortcut–and the market noticed

AI News

by Dashveenjit Kaur

February 24, 2026

AI-Generated Deep Dive Summary

Artificial Intelligence is reshaping industries, and COBOL modernization is no exception. A recent breakthrough by AI startup Anthropic has sent shockwaves through the market, causing IBM shares to drop 13%—the worst single-day decline in over two decades. The culprit? Anthropic’s Claude Code tool, which promises to accelerate the process of updating legacy COBOL systems, traditionally a time-consuming and expensive endeavor relying on armies of consultants. This development highlights how AI is disrupting long-established practices in tech and finance. COBOL, an outdated programming language, remains deeply embedded in critical financial and government systems. Despite its age, it powers over 95% of U.S. ATM transactions and hundreds of billions of lines of code globally. The challenge lies not just in the code itself but in the dwindling number of developers who understand COBOL. As older programmers retire, this scarcity has driven up costs for modernization projects, making them a lucrative area for consulting firms like IBM, Accenture, and Cognizant. Anthropic’s Claude Code tool aims to change that dynamic. By automating tasks like mapping dependencies, documenting workflows, and identifying risks, it claims to reduce the time needed to modernize COBOL systems from years to just quarters. This shift could significantly lower costs and make legacy system upgrades more feasible for organizations. The tool’s potential to streamline these processes has immediately impacted investor sentiment, signaling a broader reassessment of how AI might disrupt traditional consulting models. While Anthropic’s innovation is groundbreaking, it’s not entirely new ground for IBM. The tech giant had already begun exploring AI-driven solutions for COBOL modernization years ago with tools like Watsonx Code Assistant for

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Originally published on AI News on 2/24/2026