GenAI is Making Inroads in the Legal Sector
The report highlights that generative AI is finally gaining traction in the legal field. AI-powered tools are being implemented across various legal tasks, including drafting, case management, and discovery. This surge in adoption is evident in the actions of major US law firms, with firms such as Latham & Watkins, Cleary Gottlieb Steen & Hamilton and Reed Smith bringing in in-house AI experts. Legal tech start-ups focusing on AI solutions for law firms are also gaining momentum, with Harvey AI recently raising $100 million in Series C funding.
The Rise of Specialized AI Hardware
The report analyzes the AI hardware landscape, observing that while NVIDIA continues to dominate the market, a new breed of AI chip start-ups are focusing on inference. Groq has distinguished itself by raising $640 million in Series D funding at a valuation of $2.8 billion for its Language Processing Unit, specifically designed for AI inference tasks. Groq has secured partnerships with industry leaders like Aramco, Samsung, Meta, and Earth Wind & Power, highlighting its growing influence.
The Challenges of AI Entrepreneurship
While the report acknowledges the success of some AI start-ups, it also emphasizes the inherent difficulties of entrepreneurship in this domain. Despite attracting substantial investment, many AI start-ups struggle to translate cutting-edge research into commercially viable products, often leading to outcomes like pseudo-acquisitions, where larger companies absorb the talent and technology while providing investors with a licensing fee instead of a traditional acquisition.
Predictions for the Year Ahead
The report offers several predictions for the coming year, some of which directly impact the trajectory of AI in the legal industry. These include continued NVIDIA dominance in the AI hardware sector and the expectation that open-source AI models will surpass OpenAI's o1 in certain reasoning benchmarks. These developments could influence hardware choices made by legal tech companies and provide greater flexibility in choosing and customizing AI models to suit specific legal needs. We discussed these predictions and their implications in more detail in our <a href='/blog/state-of-ai-report'>State of AI blog post</a>.
Conclusion
The 'State of AI Report 2024' underscores the rapid advancement of AI and its increasing relevance to the legal profession. The trends highlighted in the report, particularly the rise of generative AI in law, the evolution of AI-specific hardware, and the challenges of AI entrepreneurship, will undoubtedly shape the future of legal tech. Foytech is dedicated to closely monitoring these developments and leveraging these advancements to create innovative solutions.
Link to the report: https://www.stateof.ai
