As Publishers Seek AI Payments, AP Gets a First-Mover Safeguard

The AP built in a first-mover safeguard, often referred to as a “most favored nation” clause, that gives it the right to reset the terms if another company gets a better deal from OpenAI, according to people familiar with the agreement.

News organizations are still in the early stages of evaluating generative AI tools from companies including OpenAI, Microsoft and Google, which are trained on vast amounts of internet data, including news articles.

Several publishers are seeking payments for the use of their content. With no precedent in the industry, determining the fair value of what they produce isn’t straightforward.

The AP was the first major publisher to strike a pact with a major AI platform, and its favored nation clause reflects the uncertainty in the industry about how much news content is worth to AI bots.

The AP didn’t disclose the terms of its deal. “AP refrains from discussing the details of its business arrangements,” a company spokeswoman said. OpenAI declined to comment.

The phenomenon of generative AI, unleashed by OpenAI’s sophisticated chatbot ChatGPT, has shaken up big technology companies and threatens to transform publishers’ business models, which are largely reliant on revenue from advertising and subscriptions.

Early versions of Google and Microsoft’s generative AI-powered search tools provide users with detailed answers pulled from various sources. Publishers fear that feature will make people less likely to click on their sites, putting a major dent in their traffic and ad revenue.

Getting paid by AI platforms could offset the impact of the technology, to some degree. News Corp, parent of The Wall Street Journal, has been working internally and with an external consultant to assess the value of its content for the purpose of AI training, according to people familiar with the matter. The resulting figures will likely factor into future negotiations with companies such as Google and Microsoft, one of the people said.

News Corp, whose other properties include the Times of London and the New York Post, has explored the idea of protecting its intellectual property by using blockchain technology, according to people familiar with the matter. The technology would allow individual pieces of content to be tagged, to detect when AI companies are using it without permission and possibly pursue licensing revenue. The effort is dubbed “News Protocol.”

Publishers including Axel Springer, the New York Times, Condé Nast, Dotdash Meredith parent IAC and Penske Media have discussed the formation of a coalition to tackle issues around AI. News Corp has decided not to be part of the coalition, according to a person close to the company.

While they explore new commercial relationships, news publishers are also considering the impact of the AI tools on their news operations and various business functions.

Google has pitched a generative AI product to publishers that can help write articles and support other business functions. People who have seen it described the product, which internally is called “Genesis,” as functioning like a publishing platform. The New York Times earlier reported on Genesis.

“In partnership with news publishers, especially smaller publishers, we’re in the earliest stages of exploring ideas to potentially provide AI-enabled tools to help journalists with their work,” a Google spokeswoman said in a statement. “For instance, AI-enabled tools could assist journalists with options for headlines or different writing styles.”

News Corp is also exploring the creation of its own AI-powered products, such as advanced text-to-voice features. The company recently hosted a hackathon led by Technology Chief David Kline. Some of the ideas were presented at a meeting this week for senior leadership, including Rupert Murdoch, the executive chair of News Corp, according to people familiar with the matter.

As part of AP’s deal, OpenAI will license part of the news business’s text archive, and AP in turn will “leverage OpenAI’s technology and product expertise,” the AP said in a press release announcing the deal.

AP has already been using AI to automate corporate earnings reports, as well as stories previewing and recapping some sporting events, but it doesn’t currently use the more sophisticated generative AI in its news stories.

—Keach Hagey contributed to this article.

Write to Alexandra Bruell at [email protected]

Originally appeared on: TheSpuzz