How Publishers Are Expected to Work With AI Firms in 2024

The ongoing battle between artificial intelligence models and publishers is not an even playing field, and media outlets with high-quality data are in the spotlight as AI firms eye lucrative deals to elevate their large language models and capabilities. However, more lawsuits are coming down the pike in 2024, potentially overshadowing the influence of regulations, representing the next frontier of publishers' thorny relationship with tech platforms. The New York Times is suing OpenAI and Microsoft, alleging that the "widescale copying" conducted by their AI systems amounts to copyright infringement. The legal action followed months of unsuccessful negotiations between all companies, with the publisher aiming to “ensure [that The New York Times] received fair value for the use of its content,” as outlined in the lawsuit. This underscores the intricate challenges that may emerge when anticipated deals—such as those struck by other publishers like Axel Springer and the Associated Press—fail to materialize as planned. Publishers' AI Licensing Negotiations Mark an Inflection Point “Most publishers will try to get some sort of agreement [with AI firms],” said Yoram Wurmser, principal analyst at Insider Intelligence. “If they don’t, they may end up in court. I expect to see a ton of lawsuits until these data issues [such as fair use] are clarified within regulations.” The mounting uncertainty surrounding generative AI has prompted publishers to ink new deals with AI companies, like AP and OpenAI, granting them access to publishers’ contemporaneous data in exchange for payment. The data owned by premium publishers trains LLMs and dictates the quality of these models. Consequently, AI firms are in a race to establish dominance in the market, ultimately amplifying the negotiating leverage of premium publishers. “There is a need to access very high-quality data to maintain [OpenAI’s] position as the top contender in the foundational model space,” said Katie Gardner, partner at law firm Gunderson Dettmer. “Entering into multiple deals at least reduces the potential number of plaintiffs against an AI company.” Premium news outlets with large subscription bases, such as The New York Times, house a wealth of data points—including exclusive content, op-eds and analysis—that factor into financial compensation when brokering deals. However, should deals crumble, and publishers opt for legal action, they have a little leverage. The Times has not demanded a specific amount of damages, but it "seeks to hold them responsible for the billions of dollars in statutory and actual damages,” per the lawsuit. OpenAI or Microsoft is anticipated to submit a motion to dismiss within the coming months, said Gardner. "Realistically, companies would much rather agree, since litigation is expensive," she added. Deals, both big and small Regardless, deals of all sizes are expected this year. High-dollar deals usually ranging in eight-figure amounts will see publishers grant exclusivity or broad rights to a single AI model, said Gardner. Lower-dollar deals are more likely to be nonexclusive, allowing the data owner to preserve multiple options for commercializing the data across various products. In the case of lower-dollar deals, publishers might explore extending agreements to involve multiple AI companies, rather than restricting themselves to a single one, ultimately retaining control over how broadly the licensee can use the data to train models. However, if mandatory licensing becomes the norm, it could limit AI development to players with deep pockets that prefer publishers with premium data. As a result, smaller publishers possessing lesser unique content will have little negotiating power over AI giants, according to Wurmser. In the absence of a regulatory framework, publisher trade organizations will likely either press the government for regulatory support or create a collective bargaining situation, Wurmser noted.

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How Publishers Are Expected to Work With AI Firms in 2024

Data quality will dictate deal sizes and negotiating power

Trishla Ostwal

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Trishla Ostwal