Anthropic’s February 23, 2026 announcement that Claude Code could automate COBOL modernization rattled investors, sending IBM shares down 13.2% that day, their biggest one-day drop since October 18, 2000. IBM’s Rob Thomas countered in a blog post that translating COBOL and modernizing a platform are not the same job, citing the stack around IBM Z, including z/OS, CICS, IMS, Db2, RACF and MQ. The debate is underscored by research showing AI migration can hide silent bugs. Ashutosh Singhal, founder of Veriprajna, described in a Medium essay on June 2, 2026, an AI agent migrating a bank’s wire transfer module from COBOL to Java; the code compiled and unit tests passed, but the first transaction in user-acceptance testing tripped database consistency checks. The culprit was a variable called TRN-LIMIT, defined in a COPYBOOK thousands of lines away, carrying a REDEFINES clause; the model treated it as a standard integer instead of a packed decimal, sending bad binary data to the database. An arXiv preprint called AgentModernize by Sheikh Nazib Ahmed and Marnim Galib argues line-by-line translation can break edge-case handling, validation logic, or hidden constraints. Another 2026 arXiv paper, SEDCoT by Phillip Entin, Wenchao Gu, Alexander Knapp