AI Disrupts Legal Services Market

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$11B Chips Deal - The U.S. is set to grant TSMC $6.6B + $5B in low-cost loans for three chip factories in Arizona, one of the biggest CHIPS Act awards yet.

Texas Chip Factory - Samsung will double its investment to $44B to build a semiconductor hub in Texas and expects to fund it through a CHIPS Act grant.

American Privacy Rights Act - A bipartisan bill aims to set a national data privacy standard and create a right to sue and seek damages over violations.

UK AI Hub - Microsoft is creating a London AI hub headed by former Inflection/DeepMind AI scientist Jordan Hoffmann and plans to invest ~$3B.

Tesla Robotaxis - Elon Musk said Tesla will reveal its fully self-driving,  Cybertruck-inspired, EV robotaxi on Aug. 8 with revenue potential for owners.

Total Eclipse - NASA shared amazing footage shot from space of the Moon's shadow engulfing huge swathes of the U.S. during yesterday’s solar eclipse.

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The Hottest Thing in Tech this Week

AI Disrupts Legal Services Market

San Fran custom LLM startup Mirage was just acquired by the Sequoia- and OpenAI startup fund-backed GenAI company Harvey to help scale its’ applied research building the future of professional services. This deal signals massive changes in the legal sector, as tech companies like Harvey become formidable players. Goldman Sachs has predicted genAI may replace 44% of legal tasks, and Reuters predicts traditional firms will face much heavier competition from AI-driven tech companies and be forced to “adapt or be left behind”.

While humans will always be essential, the legal profession will look very different within as little as a few years. Predictions include AI resulting in:

1. Law Firms hosting Artificial Intelligence as a Service tools (AIaaS);

2. AI firms acting as “alternative legal service providers” (ALSP);

3. Fewer junior roles and less time spent on basic tasks;

4. Billing shifting from “billable hours” to “Value-based”;

5. Disruption of the pyramid hierarchy of legacy firm structures;

While the legal industry has been cautious about AI adoption due to concerns around explainability and accountability, particularly in high-stakes scenarios, this acquisition and the rapid growth in legal AI suggest that these hurdles are being overcome as models become more transparent and reliable.

The firms that succeed in this environment will be those able to adapt, either by adopting AI tools, partnering, or acquiring the skills to build in-house. There will be many opportunities for legal professionals from solopreneurs to global firms to experiment to leverage AI’s value adds. There will also be a heavy incentive to refocus on building human-centric client relationships and emphasizing the unique creative, strategic, and problem-solving value humans bring to the Law. In the long run, this could be a win/win for companies and clients alike.

Deals We’re Watching

Founders to Watch and Opportunities to Catch

Open Deals:

Looking to invest? Let us know if you want a warm intro —> [email protected]

1. Investment Due Diligence AI - Irvine, CA - AI model trained for upfront DD on PE and VC dealflow upending the institutional back office and unlocking the investor referral network. Led by former IBM, current PE and VC execs. (Seed)

2. Employee Recruitment App - San Francisco - AI platform enhancing enterprise HR functions including recruitment and retention through automated person matching. Founder closed 8 figure exit from last startup. (Pre-Seed)

3. AI-Agent Employees - NYC - based business software to generate a fleet of job-specific AI employees for task execution and data interaction, backed by Tribe. (Seed+)

4. Healthcare Admin Billing - Los Angeles - Simplifying health documentation with translatable billing and QA for faster Dx coding with AI/ML. Post revenue. 20 Major healthcare clients in pipeline. Serial entrepreneur/founder of medical group. (Seed)

Raising for your startup? Send us your Open Round —> [email protected]

Closed Deals:

NoSQL Database - California startup Aerospike closed a $100M Series E and provides its real-time database platform to clients like Airtel, TransUnion, Snap and Yahoo.

Space Drugs - San Fran microgravity manufacturing startup Varda Space Industries closed its Series B at $90M from Caffeinated, Lux, General Catalyst, Founders Fund, and Khosla.

Smart Battery Storage - Utah startup Torus raised $67M for its unit to manage and optimize power usage backed by Origin, Epic, & ICONIQ.

Robovision - A Belgian no-code computer vision AI startup closed a $42M Series A at $180M PMV to expand to the U.S. industrial & agribusiness market.

Physical AI - Palo Alto startup Archetype emerged from stealth with a $13M seed from Amazon and Hitachi. Its’ first-of-its-kind, physical AI foundational model lets you talk to houses, cars, and factories in real-time via sensors.

Companies to Watch:

xAI Raising - Investors close to Elon Musk are reportedly in talks to help xAI raise $3B at an $18B PMV from Steve Jurvetson & Gigafund, an Austin VC firm co-founded by PayPal & Founders Fund co-founder Luke Nosek.

AI Device Unicorn? - Jony Ive and Sam Altman are in talks with the Emerson and Thrive Collectives to raise up to $1B for a secretive portable AI device startup per The Information.

The Funding Buzz

Open: Tamarack Global - Targeting $100M for its second fund with backing from a16z GP’s Marc Andreessen and Chris Dixon and Silver Lake Execs to support ~30 early-stage startups at the intersection of software and hardware.

Open: Galaxy Digital - Mike Novogratz’s crypto-focused firm is in the early stages of raising a $100M venture fund primarily from outside investors.

Bitkraft Ventures - The Denver firm with $1B+ AUM raised $275M towards its third fund to invest in Seed - A stage gaming studios and production platforms.

Maniv - Israeli/U.S. VC firm closed its third fund at $140M to invest in Seed - A stage startups at the intersection of mobility, transportation, and energy.

Trending Tools and Buzzy Tech

Tools

Google - Launches Find My Device network to locate offline Android devices.

Anthropic - Claude ‘Tool Use’ unlocks more tasks, data sources, & functions.

Cohere - Command R+ model is competitive/cheap on business-critical tasks.

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