Shares in Anglo-Dutch data group RELX (REL) hit a new year low on worries over AI (artificial intelligence) competition. US firm Anthropic is seen as a particular threat after it unveiled a new AI tool for legal teams.
| Share price: £21.90 (-15%) | PE: 21.4x |
| Market cap: £39.7bn | Yield: 2.5% |
AI-POWERED SOLUTIONS
RELX shares, which were already down 15% since the start of the year, lost a further 15% on the Anthropic news. Rival European publishing group Wolters Kluwer also saw its shares tumble on the news.
Anthropic, the company behind the AI chatbot Claude, added new functions for legal users of its Cowork assistant on GitHub. The company has become a prominent player in the development of high-end AI models.
Anthropic said its AI-powered services for legal teams could automate contract reviews, NDA triage, compliance workflows and legal briefings. In addition, the new AI-powered plug-in can configure documents to a firm’s specific rules and risk tolerance.
RELX and Wolters Kluwer provide tools for the legal sector and legal revenues are RELX’s third biggest market. Wolters Kluwer provides software tools for the legal and other professional markets.
Given the pace of AI innovation, it was only a matter of time before the legal market came into play. The amount of money generated by teams of lawyers drawing up documents represents a huge bounty for savvy developers.
Firms like RELX and Wolters Kluwer have steadfastly maintained they have their own AI tools and they aren’t at risk. However, low-cost competitors like Anthropic can sweep through professional marketplaces like locusts devouring everything in their path.
For RELX shares to lose over 30% this year is yet another blow for investors in Finsbury Growth & Income (FGT). At the last count, RELX was the fourth largest holding in the trust with a 10.8% weighting in the portfolio.
Manager Nick Train had better hope for good results from the rest of his top five holdings. LSE Group (LSEG), the third-biggest holding, reports on 26 February, while fifth-biggest holding Unilever (ULVR) reports on Thursday 12 February.
You might also like these stories:
