The computer language COBOL was born in 1959, when Jawaharlal Nehru was still Prime Minister and China had just occupied Tibet. Short for Common Business-Oriented Language, it was, along with Fortran, one of the first programming languages to be based on English words. By 1997, 80 per cent of the world’s businesses ran on COBOL, with a cumulative total of 200 billion lines of code in existence.
In 2021, the typical salary for a COBOL programmer was $76,000 a year (according to a pay survey from Stack Overflow). Anthropic, the American artificial intelligence firm headquartered in San Francisco, was founded that year.
Now, the computer language still essential to many US banks and government agencies has finally met its match in the AI company’s Claude Code tool. COBOL is run largely on IBM, or International Business Machines, systems and Anthropic’s new tool has led to IBM shares taking the worst tumble in 25 years as the new kid on the block promises to modernise COBOL. India’s top tech stocks such as Infosys and TCS have taken a hit too amid global uncertainty.
“Vibe coding” — or using AI tools such as Claude Code or OpenAI’s Codex to generate code for websites or apps — is the latest AI trend and it has the potential to transform the software development industry. Software stocks have been under pressure in recent months as AI disrupts established workflows.
According to Anthropic, COBOL handles an estimated 95 per cent of ATM transactions in the US. “Hundreds of billions of lines of COBOL run in production every day, powering critical systems in finance, airlines and government,” the company, founded by siblings Dario Amodei and Daniela Amodei, said in a statement.
COBOL was associated with the Y2K phenomenon at the turn of the century, a software problem arising from the inability of computers to switch dates to the 21st century. Thousands of COBOL programmers were pulled out of retirement to update old code, ensuring its continued viability.
The UK government’s State of Digital Government report last year found its IT portfolio wanting, noting that it was still paying top dollar for “contracts for maintenance of COBOL systems”.
Anthropic is hoping to release businesses from the grip of the old programming language. “Tools like Claude Code can automate the exploration and analysis phases that consume most of the effort in COBOL modernisation,” the company said in a statement.
Most of the mainframe computers that run COBOL are from IBM. The idea of a service to make working with COBOL easier has been circulating for years. IBM itself debuted a tool in 2023 that uses AI to work with COBOL, including converting it into Java. The company’s chief executive, Arvind Krishna, said in July 2025 that IBM’s AI coding assistant for mainframes “has got very wide adoption”.
There is a clear demand for a tool to streamline COBOL but whether Claude Code can fill those shoes is still to be seen.