On October 24, IBM's shares faced a dramatic decline of 13.2%, marking the most significant drop in over 25 years. This steep decline was part of a broader sell-off in technology stocks triggered by a viral article discussing the negative impacts of artificial intelligence on certain sectors. Market analysts highlighted that IBM's falling stock was largely tied to new developments in the AI space, particularly relating to the legacy programming language COBOL which is heavily used in IBM's core markets.

The specific catalyst for the decline was the announcement from AI startup Anthropic regarding their AI tool, Claude Code, which is positioned as a modern solution for updating the antiquated COBOL systems widely used in banking, insurance, and government sectors. The tool by Anthropic promises to revolutionize the labor-intensive process of modernizing COBOL systems, which have traditionally required extensive consultant time and effort to analyze workflow. By automating tasks that consume the bulk of modernization efforts, Claude Code represents a direct threat to IBM's historical reliance on its COBOL expertise.

The implications of this announcement are significant as it not only affects IBM's stock value but also highlights the increasing competitive pressure that traditional companies face from innovative AI startups. As AI continues to evolve and disrupt established industries, firms like IBM may need to reconsider their strategies to remain relevant and competitive in a rapidly changing technological landscape.