Nuix boss says AI will provide a reset for the software company after years of controversy

After a turbulent two years, the former market darling is counting on artificial intelligence to help usher in a new era even though not all controversies are over.

Nuix chief executive Jonathan Rubinsztein in Sydney. Picture: Britta Campion

Artificial intelligence technology will usher in a new era for software company Nuix after two years of court cases, executive departures and a seesawing share price, chief executive Jonathan Rubinsztein says.

Nuix‘s share price is up by about 65 per cent over the past month, following a turbulent two-year period for the company during which former boss Eddie Sheehy departed and the company was hit with multiple shareholder class action lawsuits.

The company was the biggest ASX IPO of 2020, but was later investigated by the corporate regulator over allegations it had lied in its prospectus documents.

In an interview ahead of the release of his company’s full-year financial results on Thursday, Mr Rubinsztein said there were “cultural complexities” at Nuix ahead of his arrival in late 2021 that had now largely been resolved, thanks to a combination of staff and executive turnover, and wins in court.

“I would suggest that there were lots of cultural complexities. Some of them would have been caused by some of the trauma that the organisation’s gone through,” Mr Rubinsztein said.

“We have been load balancing and getting the right skill sets in as we look at what we’re building, which is a much more sophisticated platform.

“I think that there are still some complexities in the business, but the complexities have reduced quite a lot. We’ve had some good success in some court cases, and our execution has improved dramatically.

“And I think that value is directly correlated to execution. So as our execution improves, I think that our value will increase.”

Mr Rubinsztein said he believed the share price still had room to grow as long as his team continued to execute strongly, and that the company could reclaim its lost “market darling” status.

“There are unfortunately still some legacy issues but, you know, as we execute they will move out of frame,” he said. “I’m hoping that the narrative changes, because this is a great Australian business. It really is, and we are doing amazing things.”

Nuix’s investigative analytics and intelligence software takes unstructured data such as images, text and voice data and makes it searchable.

The company’s next big bet is its “Neo” platform, which Mr Rubinsztein said could read up to 2000 different file types, relying on AI to process what was typically messy unstructured data. He said work on Neo began well before the advent of ChatGPT, and it relied on technology from a 2021 acquisition of Boston-based natural language processing specialist Topos Labs.

“We are selling to law enforcement, we’re selling to the legal industry, which means that if you look at the AI, they will require some very specific things, which is they need it to be explainable,” he said.

“We‘ve trained the AI to say, ‘what is sensitive data? What is a credit card? What is a social security number? What is a passport?’

“When you’ve had big cyber breach, the issue is that you typically have search strings and you search for ‘credit card’ and ‘passport’ and it would find a whole lot of false positives, because it might find an email about a missing credit card, and a human has to manually go in and review that.”

Nuix CEO Jonathan Rubinsztein.

Neo reduces the number of false positives by up to 95 per cent, Mr Rubinsztein said, in what he described as an “explosion of opportunity” for his company, as hype around AI technologies continued to grow.

Mr Rubinsztein is currently the subject of an investigation by the Australian Securities and Investments Commission for acquiring shares in September last year, at the same time as preliminary discussions with a potential acquirer, Reveal. Mr Rubinsztein and Nuix have denied the allegations and said the executive was not aware of the discussions and that his share acquisitions were compliant.

Nuix has also faced media attention about concerns over its corporate governance and allegations it breached ASX disclosure rules, as well as multiple shareholder class actions following its $1.8bn IPO in 2020.

Mr Rubinsztein said that while some of the critical media coverage had affected Nuix’s sales and contract pipeline, the impact of that was limited to Australia.

“It’s been difficult however, it’s very specific to Australia, which is only 10 per cent of our business,” he said of the media coverage.

“Outside of Australia, our customer base is very comfortable and the noise really hasn’t impacted our growth. In Australia, it’s probably impacted the staff more than anything.

“The one thing I’ve done is just focused the organisation on execution. There’s a lot of legacy stuff that happened three, four, five years ago, and I wasn’t here and most of the team wasn’t here yet. My view is if we execute well then we can be really proud of the results.

“I’m looking forward to continuing to execute, drive new customer opportunities and extend into our existing space.

“And I think just the continued focus on the growth of the business which in this last 12 months has been phenomenal.”