Thomson Reuters to Acquire AI Legal Tech Startup Casetext for $650 Million in Cash

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Thomson Reuters has signed a definitive deal to acquire Y Combinator-backed legal tech startup Casetext.

The transaction, valued at $650 million in cash, is expected to close in the second half of 2023, subject to regulatory approvals and customary closing conditions.

“The acquisition of Casetext is another step in our ‘build, partner, buy’ strategy to deliver generative AI solutions to our customers,” said Steve Hasker, CEO of Thomson Reuters. It is.” “We believe Casetext will accelerate and expand the market potential of these products, revolutionizing how professionals work and work.”

Casetext, which TechCrunch has covered many times throughout its history, was founded in 2013 and was initially both a community for lawyers to share their knowledge and a service that gave users free access to legal documents annotated by lawyers. was focused on creating But the company has since pivoted, embracing AI and ML to build automated workflows and tools for its legal team.

Casetext’s flagship product is CoCounsel, which uses AI to review documents, create legal investigative notes, create depositions, and analyze contracts. Casetext is one of the few granted early access to OpenAI’s GPT-4 language model, which serves as the infrastructure backend for CoCounsel.

Casetext’s AI-powered legal technology.

With 104 employees, Casetext has a client base of over 10,000 law firms and corporate legal departments, according to a press release. Leading up to the acquisition, the company has raised over $64 million from Union Square Ventures and others.

“Over the past decade, we have harnessed the power of AI to improve the practice of law and create products that enable lawyers to meet the legal needs of more people,” said Jake Heller, CEO of Casetext. The ultimate goal is to increase access to justice,” said Jake Heller, CEO of Casetext. statement. “Joining Thomson Reuters is a leap forward in our mission and field of generative AI solutions, not just in the legal profession, but beyond the profession, so that as many people as possible can benefit from this transformative technology. It’s a great opportunity to do that.”

For Thomson Reuters, the acquisition is part of a long-term strategy to embed generative AI into key business areas such as legal, tax, accounting and news. The company recently spent about $100 million a year on AI, plans to incorporate generative AI into its products in the second half of this year, and has seen mergers and acquisitions (many of which focus on AI) between now and now. announced that it plans to secure $10 billion for 2025.

When it comes to Reuters legal work, generative AI seems like a smart investment, if the findings are to be believed. A Reuters poll released in 2023 (which should obviously be taken with a grain of salt given its sources) found that 82% of legal professionals believe generative AI could be easily applied to legal work. bottom.A slightly smaller majority, 51%, said that generative AI was should do it Applies to legal work.

Some believe generative AI technology could add trillions of dollars to the global economy. Others are more skeptical, pointing to excessive hype and possible job losses. Either way, venture capital and corporations alike are pouring huge sums into the space, and the generative AI market is projected to generate $36 billion in revenue by 2028.