European publishing and legal software companies have suffered a sharp decline in their share prices after US artificial intelligence startup Anthropic revealed a tool for use by companies’ legal departments.
Anthropic, the company behind Chatbot Cloud, said its tool can automate legal tasks like contract review, non-disclosure agreement triage, compliance workflows, legal briefings and templated responses.
Shares of UK publishing group Pearson fell nearly 8% following the news, and shares of information and analytics company Relx fell 14%. Software company Sage lost 10% in London and Dutch software company Wolters Kluwer lost 13% in Amsterdam.
Shares in London Stock Exchange Group fell 13% and shares in credit reporting company Experian fell 7% amid fears over the impact of AI on data companies.
Shares of Nasdaq-listed Thomson Reuters fell 18%.
“Companies like Relax, London Stock Exchange Group, Experian, Sage, Informa and Pearson went bust as AI provider Anthropic introduced a new product,” it said. Dan Coatsworth, head of markets at AJ Bell. “The concern would be that, at a minimum, the emergence of the tools unveiled by Anthropic will reduce the margins enjoyed by these data-driven companies and, at worst, disintegrate them altogether (removing them as providers).
The FTSE 100 hit a record high on Tuesday morning, but a selloff pulled the blue chip index into the red.
Anthropic said the plugin does not provide legal advice. “AI-generated analyzes should be reviewed by licensed attorneys before being relied upon in legal decisions,” the startup said.
The company also announced several other open-source tools to automate many business activities, including sales and customer support.
Anthropic was founded in 2021 by its chief executive Dario Amodei and other former staff members of OpenAI, which developed ChatGPT.
“Anthropic launched new capabilities in the legal sector for its cowork offering, increasing competition within the sector,” Morgan Stanley analysts said in a note on Thomson Reuters. “We see this as a sign of increased competition and thus a potentially negative signal.”
The share price fall is another serious blow to Nick Train, one of the UK’s most high-profile fund managers, whose firm Lindsell Train has run the Finsbury Growth & Income Trust since 2000. The trust’s four biggest holdings are Sage, Experian, the London Stock Exchange and Relax and its shares fell more than 5% on Tuesday.
Priceline apologized again for the investment trust’s “poor” performance at its annual meeting last month, after avoiding a vote on its future. The FTSE 250-listed company is the worst-performing UK equity income trust over one year and five years.
This news will rekindle the fear of job losses due to AI boom. Clifford Chance, one of the largest international law firms, said in November that it was reducing the number of professional services staff at its London base by 10%, citing the increasing use of AI as a factor behind the decision.
As well as factory jobs that can be automated, office-based jobs are considered vulnerable to advances in AI – computer systems that perform cognitive tasks typically associated with human intelligence.
Britain is losing more jobs than it is creating as companies adopt more AI tools, and is being affected more than rival larger economies, according to a study by Morgan Stanley.
More than a quarter (27%) of UK workers are worried that AI could result in them losing their jobs in the next five years, a recent survey of thousands of employees has revealed. It found that British businesses reported an average 11.5% increase in productivity with the help of AI. American businesses reported similar gains, but they created more jobs than they cut.
In his annual Mansion House speech last month, London Mayor Sadiq Khan said AI could destroy a large number of jobs in the capital. He said London was “on the sharpest edge of change” due to its reliance on white-collar workers in the finance and creative industries and professional services such as law, accounting, consulting and marketing.
Technology Secretary Liz Kendall also warned that “some jobs will be lost”, as she announced plans to train 10 million British workers, including cabinet members, in basic AI skills by 2030.
Lindsell Train and Nick Train have been contacted for comment.
