Shares in European publishing and legal software companies plummeted after US AI startup Anthropic unveiled a tool designed to automate legal department tasks. The tool, which can handle contract review, non-disclosure agreement triage, compliance workflows, legal briefings, and templated responses, sent shockwaves through the market.
UK-based Pearson fell nearly 8%, while Relx plunged 14%. Sage lost 10% in London, and Wolters Kluwer dropped 13% in Amsterdam. The London Stock Exchange Group declined 13%, and Experian fell 7%. The FTSE 100, which had hit a record high earlier, was dragged into the red by the sell-off.
Dan Coatsworth, head of markets at AJ Bell, commented: 'The likes of Relx, London Stock Exchange Group, Experian, Sage, Informa and Pearson were smashed as AI provider Anthropic unveiled a new product. The concern will be that, at the very least, the emergence of tools like the one unveiled by Anthropic will reduce the margins these data-driven companies can achieve and, in a worst-case scenario, disintermediate them entirely.'
Anthropic clarified that the plugin does not provide legal advice and that AI-generated analysis should be reviewed by licensed attorneys. The company also released other open-source tools for sales and customer support. Morgan Stanley analysts noted that the launch 'heightened competition within the space' and viewed it as 'a potential negative.'
The sell-off dealt a severe blow to fund manager Nick Train, whose firm Lindsell Train runs the Finsbury Growth & Income Trust. The trust's four largest holdings—Sage, Experian, London Stock Exchange, and Relx—led to a more than 5% drop in its shares. Train had recently apologised for the trust's 'dire' performance.
The news reignites fears of AI-driven job losses, particularly in office-based roles. A recent survey found 27% of UK workers worry their jobs could disappear within five years due to AI, while businesses report an average 11.5% productivity gain from AI adoption. London mayor Sadiq Khan warned that AI could destroy 'swathes of jobs' in the capital, and Technology Secretary Liz Kendall acknowledged that 'some jobs will go,' announcing plans to train up to 10 million workers in basic AI skills by 2030.
