Infosys shares declined nearly 3%, while HCL Technologies, Mphasis and Persistent Systems shares were down more than 2% each. TCS, Tech Mahindra, Wipro and other stocks were down around 2% each, pushing the Nifty IT index down more than 2% to 30,849.05, as seen at 9.20 am.
Anthropic on Monday said Claude Code could automate much of the exploration and analysis that drives the complexity of COBOL modernisation, a key business area for IBM. IBM has long sold mainframe systems optimised for large-scale transaction processing, where COBOL is widely used.
Short for Common Business-Oriented Language, COBOL is a dominant programming system developed in the late 1950s and is commonly used in business data processing, including payment processing and retail transaction systems. According to Anthropic, an estimated 95% of ATM transactions in the US still rely on COBOL, making it a potential target for cost-efficient AI disruption.
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“Hundreds of billions of lines of COBOL run in production every day, powering critical systems in finance, airlines and government. Despite that, the number of people who understand it shrinks every year,” Anthropic said in its latest blog post.
Selling pressure in IT stocks had already begun earlier this month after Anthropic unveiled a new AI product designed to automate a wide range of professional tasks, reigniting concerns that artificial intelligence could erode the profitability and competitive moats of traditional IT services companies.The company, which develops the Claude chatbot, said the product can automate several legal functions, including contract reviews, non-disclosure agreement triage, compliance workflows, legal brief preparation and standardised responses.
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At the centre of the market reaction is growing concern that AI could fundamentally reshape the competitive landscape for software and IT services firms, potentially weakening both profitability and market positioning.
Industries once considered relatively insulated from AI disruption, including legal services, data analytics and customer support, are now increasingly in focus. If AI is able to automate these functions, the large IT services industry built around delivering them could face significant challenges.
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