Legal AI startup Harvey, valued at about $15.6bn, built its product around
training models similar to OpenAI's GPT-4 for law firms. After a March update
client usage surged but gross margin fell from roughly 50% at the start of the
year to -50% in June, a person familiar with the matter said. Facing rising AI
operating costs, Harvey has shifted to open-weight AI—cheaper than proprietary
US offerings and allowing firms to train custom models on their own data—joining
a growing number of software companies making the move.
