‘Investors are nervous’ – will Google and OpenAI follow Anthropic with legal tools?
Anthropic’s release of a legal plugin was “inevitable,” says the CEO of legal AI firm Wexler, who adds that investors’ surprising reaction may be due to nerves and a desire to find a reason to sell.
Tech giant Anthropic unveiled a new tool aimed directly at in-house lawyers on Tuesday, but the move rattled investors, wiping billions off the market value of Europe’s biggest data, publishing, and legal software groups.
One of the hardest hit firms was information-based analytics firm Relx, which is in the top 20 of the City’s most valuable blue-chips and saw over £6bn wiped from its market value, with a fall of over 16 per cent on Tuesday.
Speaking to Morning Wire, Gregory Mostyn, CEO of Wexler AI, explained that Anthropic’s announcement was not shocking; the firm has released a sort of limited legal plugin for routine queries for over a year.
“I think the issue here is that if investors hadn’t quite priced this in, or are using it as an excuse to exit positions, maybe they’re already nervous,” he added.
Mostyn explained that the foundation models of companies that saw a drop in shares are mostly research and information-based and rely on their legal data, but now AI is muscling in. These companies had been “priced as if AI wasn’t coming to their core business”, and now the market is waking up to that risk all at once.
He pointed out that many legal tech companies have built products around contract review and simple legal tasks, similar to what Anthropic is offering, and many will be “feeling rather nervous”.
Mostyn added that Anthropic’s move isn’t a one‑off shock; it’s part of a broader, predictable pattern in which all major foundation-model providers will move into legal workflows.
“I don’t know if anyone in the market is that surprised that Anthropic released a legal plugin. I’m sure OpenAI and Google will release their own soon.”
Competition is heating up
On the flip side, Mostyn claims that Anthropic’s move “validates” what the legal AI sector is doing by going deep into something really complex, rather than routine work such as NDAs and contracts.
Wexler AI, founded in 2022, provides an AI agent for litigation and dispute resolution to major law firms, including Clifford Chance, Addleshaw Goddard, and HSF Kramer.
However, the more specialised legal AI sector is growing with new legal AI firms entering the market, as he noted, “it is definitely getting competitive”.
In just two years, Legora AI’s valuation increased dramatically, from $50m to $1.8bn.
However, other platforms hit a wall: Robin AI, for example, was put up for sale on an insolvency marketplace in October after its fundraising ambitions fell short.
Mostyn pointed out that to stay competitive, there is a need to keep moving incredibly fast and continue innovating. However, he noted Wexler’s position is “we’re a scalpel, not a Swiss army knife”.