Friday, May 24

Inside the information industry’s difficult negotiations with OpenAI

For months, some of the U.S. media industry’s biggest players have had confidential talks with OpenAI about a sensitive issue: the pricing and terms of licensing their content to the artificial intelligence company.

The curtain on those negotiations was pulled back this week when The New York Times sued OpenAI and Microsoft for copyright infringement, alleging that the companies used its content without permission to create artificial intelligence products.

The Times said that before suing, it had been talking with the companies for months about a settlement. And he wasn’t alone. Other news organizations, including Gannett, the largest U.S. newspaper company; News Corp, owner of the Wall Street Journal; and IAC, the digital giant behind The Daily Beast and Dotdash magazine publisher Meredith — have been in talks with OpenAI, said three people familiar with the negotiations, who requested anonymity to discuss the confidential talks.

The News/Media Alliance, which represents more than 2,200 news organizations in North America, also spoke with OpenAI to find a structure for a deal that would suit its members, a person familiar with the talks said.

Microsoft, which is OpenAI’s largest investor and is incorporating OpenAI’s technology into its products, also held talks. “We have had in-depth conversations with a number of publishers and look forward to future discussions,” said Frank Shaw, a Microsoft spokesman.

Companies like OpenAI and Microsoft have sought licensing deals with news organizations to train AI systems that can produce human-like prose. These systems in turn power applications such as chatbots, from which companies can earn revenue.

Nearly a dozen publishing executives and media business experts say the talks have been complicated by the rapid development of artificial intelligence applications on the market, which has raised thorny questions for the future of the media industry.

In a statement, OpenAI said it respects the rights of content creators and owners and believes they should benefit from AI technology, citing its deals with The Associated Press and German publishing conglomerate Axel Springer.

“We continue to have productive conversations with many of them around the world to discuss their AI questions,” Kayla Wood, a spokeswoman for OpenAI, said in a statement. “We are optimistic and will continue to find mutually beneficial ways to work together to support a rich news ecosystem.”

News publishers have had precarious relationships with tech companies since they lost much of their traditional advertising business to upstarts like Google and Facebook more than a decade ago, and publishing executives are wary of selling their content at too low prices.

“I think part of the reason why news organizations now look so closely at OpenAI is because they have 20 years of history that indicates that if we’re not careful, we’re going to give away the keys to the kingdom,” said Andrew Morse, the publisher of the Atlanta Journal-Constitution, the flagship newspaper of Cox Media Group, which is not in negotiations with OpenAI.

There is also concern that AI applications could provide inaccurate information by citing their articles, damaging companies’ credibility.

“We went through a decade-long period of misinformation and disinformation, and this was before artificial intelligence,” said Ken Doctor, a media analyst and entrepreneur. “Now with AI on the scene, we are just at the dawn of an era where anyone has the ability to enable and multiply misinformation. And this, of course, terrifies news publishers.

However, some news organizations have reached agreements. The deal with The Associated Press, announced in July, allows OpenAI to license The AP’s archive of news articles. Financial terms were not disclosed.

Axel Springer, whose holdings include Politico and Business Insider, went further: This month it inked a multi-year deal that gave OpenAI access to its news archive and allowed the AI ​​company to use newly published articles in apps like ChatGPT. The deal, which includes a “performance fee” based on how much OpenAI uses its content, is worth more than $10 million a year, a person familiar with the deal said.

Some media companies have decided not to seek commercial deals with OpenAI. Bloomberg, which has a large business of data terminals that use artificial intelligence, has decided to push its AI efforts, according to a person familiar with the company’s strategy. The Washington Post also has not entered into negotiations with OpenAI in recent months, a person familiar with the company’s efforts said.

Despite the tension between the news industry and OpenAI, some publishing executives have underlined the potential benefits of artificial intelligence. Jim Friedlich, CEO of the Lenfest Institute for Journalism, the nonprofit owner of the Philadelphia Inquirer, said that News organizations and artificial intelligence companies were “increasingly co-dependent,” as users wanted AI technology with reliable information.

“It is important that all parties reach an agreement and, if possible, that it be reached quickly,” he said. “Whether it will take months or years, no one knows.”