Over recent years, Relx, a provider of legal and medical data services, has experienced remarkable growth, with its stock price more than doubling since 2022, reaching a peak above 4000p just last year.

This surge was driven by the company’s adept use of generative AI tools, propelling it from relative obscurity to a prominent position near the top of the FTSE 100 index.

However, the company’s fortunes have taken a downturn. The stock has nosedived 45% from its peak and recently fell 14.4%, landing at 2214p.

Relx’s previous reputation as a trailblazer in AI, especially in cybersecurity, had allowed its Swedish CEO, Erik Engstrom, to maintain a low profile.

Since he took over the reins of the former Reed Elsevier in 2009, Engstrom has shunned media attention, relying instead on the company’s strong performance to speak on his behalf.

It’s unlikely that major investors, such as BlackRock UK, holding a 7.85% stake, or activist investors like Artisan Partners, are pleased with the recent decline in stock value.

Bot luck: Legal and medical data provider Relx lost a third of it’s value following the release by San Francisco based Anthropic of an AI fix designed to automate legal work

Engstrom privately has been seeking to soothe the nerves of investors.

The main cause of Relx’s current travail is the release by San Francisco-based Anthropic – creator of AI model Claude – of an AI tool designed to automate legal work.

There will be questions as to how reliable such a tool can be when Relx, through LexisNexis, has a database of more than 160m legal documents used by many of the world’s leading law firms.

The £6billion-plus loss of value in Tuesday trading would imply that all Relx’s legal income, its fastest-growing segment, would be wiped out.

The reality is that the Anthropic plug-in is much more about the larger, separate legal services and software market than data.

The embrace of AI is meant to empower Britain’s biggest data analytics groups such as Relx, its legal competitor Thomson Reuters, the London Stock Exchange Group and credit checking specialists Experian. All have suffered because of the Anthropic antics.

We have sort of been here before. In January 2025, China’s DeepSeek sent shockwaves through Silicon Valley after a claim that it could replicate what OpenAI does at a fraction of the cost. 

The initial shock passed, and America’s AI boom picked up with even more momentum.

Engstrom at Relx is expected to go public on the perceived threat at the group’s results briefing on February 12.

It will have to be convincing otherwise doubts about his group’s model could do lasting damage.

Herald’s last stand

Anyone hoping that hedge fund manager Boaz Weinstein would retreat at the first smell of cordite at the Herald Investment Trust will be disappointed.

The American invader used his 30 per cent stake to block the loyal followers of investment whizz Katie Potts at Herald from exiting the trust at close to asset value.

The reality is that Weinstein’s Saba Capital Management was never going to leave. The real goal has been to seize control of the management of the trust. 

Herald, chaired by Andrew Joy, has cancelled a second public meeting scheduled for this week to try and forge a deal with Saba.

Ideally, a suitable buyout price for Saba’s stake would be agreed, to be paid for out of cash reserves and asset sales.

This would allow shareholders to either hang in, at a downsized trust, or leave at a price close to asset value.

The alternative is a second vote which would lead to the wind-up of the whole enterprise and deprive shareholders, many of them private investors, of exposure to the tech revolution.

New world

One of Hollywood’s greatest production houses, Disney, also faces a tech threat.

Its income has been sheltered by the outperformance of theme parks and cruise enterprises run by 28-year company veteran Josh D’Amaro.

He succeeds the great Bob Iger as chief executive. D’Amaro’s job will be to navigate change in Hollywood and the surge in armchair and mobile viewing habits.

Rupert Murdoch discovered decades ago the value of sports viewing. Disney’s ESPN sports expertise could prove to be its most effective weapon in the streaming wars.

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