Thomson Reuters, a renowned news and information company, has announced its plans to acquire Casetext, a legal startup, in a $650 million all-cash deal. The acquisition aligns with Thomson Reuters’ strategy to invest in artificial intelligence (AI), with a planned annual expenditure of approximately $100 million for AI initiatives. This investment is separate from the company’s merger and acquisition budget, which amounts to around $10 billion between now and 2025.
Casetext, based in California, has developed an AI-powered legal assistant called CoCounsel, which leverages the capabilities of OpenAI’s GPT-4 large language model. CoCounsel offers a range of features including document review, legal research memos, deposition preparation, and contract analysis, all within minutes. The early access to GPT-4 has allowed Casetext to refine its solutions and develop specific use cases for the legal profession.
With over 10,000 law firms and corporate legal departments as customers, Casetext has established a strong presence in the legal industry. The acquisition of Casetext by Thomson Reuters marks another significant step in bringing generative AI solutions to customers, according to Steve Hasker, the president and CEO of Thomson Reuters. Generative AI refers to the type of artificial intelligence that can generate new content or data in response to user prompts or questions.
The transaction is expected to be finalized in the second half of 2023, pending regulatory approvals and customary closing conditions. By acquiring Casetext, Thomson Reuters aims to further enhance its AI capabilities and provide innovative solutions to law professionals, reinforcing its position as a leader in the legal information and technology space.