Global stock markets were rattled after a US artificial intelligence firm, Anthropic, released a new set of AI tools for corporate legal teams. Anthropic says the tool is designed to handle routine legal work such as contract checks, non-disclosure agreement reviews, legal summaries, and standard drafting tasks. it is part of the company's AI assistant Claude and functions like a plugin for in-house legal teams.
The company clarified that the tool does not give legal advice and said that lawyers must review any AI-generated content before it is used.
Despite this clarification, investors were still worried that such tools could reduce the need for traditional legal research software and services, which led to a sharp reaction in the market.
Shares of major European legal and publishing firms RELX Plc and Wolters Kluwer NV fell by more than 10 per cent after Anthropic released its new legal automation tool on GitHub. Pearson Plc also slipped in trading.
US companies linked to legal research and software services were among the hardest hit. Shares of Thomson Reuters, LegalZoom, and London Stock Exchange Group fell by more than 12 per cent. Losses later spread across the software sector, with PayPal, Expedia Group, EPAM Systems, Equifax, and Intuit all dropping over 10 per cent.
The impact has even reached Indian markets by Wednesday morning, with shares of Infosys, Tata Consultancy Services, HCLTech, Tech Mahindra, and Wipro dropping sharply by as much as 6 per cent.
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