May 29, 2024
Courts Shape AI's Fate in Ongoing Legal Battles

Courts Shape AI’s Fate in Ongoing Legal Battles

The New York Times has launched a significant legal challenge against AI proponents, specifically Microsoft and OpenAI, claiming widespread copying of its journalism for training AI chatbots. This lawsuit is part of a larger dispute questioning the legality of training large language models with others’ published work without compensation.

Permissive interpretations of AI and intellectual property could shield AI entities not only in disputes with news outlets like the Times but also against lawsuits from visual artists, record labels, and authors targeting generative AI tools.

The legal ramifications extend to shaping AI development, potentially limiting how companies utilize web data for product enhancement, including the popular chatbot ChatGPT. These cases hold immense importance for creative professionals who perceive AI tools as threats to their professions and examples of Big Tech exploiting others’ labor.

The Times alleges millions of its articles were used without permission, competing directly with its authoritative journalism. OpenAI responded by expressing its commitment to respecting the rights of content creators and owners, emphasizing collaboration to ensure their benefit from AI technology and new revenue models.

Rick Allen, co-founder of Nautilus Productions, emphasized the necessity of obtaining permission for creative input, highlighting a departure from established business norms by AI companies.

Venture capital firm Andreessen Horowitz, supporting OpenAI, argued that imposing copyright liability on AI creators could hinder development, potentially impacting the U.S.’s global AI leadership.

Financial analysts anticipate potential growth opportunities in AI copyright disputes, with investors viewing licensing deals as resolutions. Evercore ISI analysts suggest the Times could sign AI licensing deals worth tens of millions of dollars per year.

Times investors seemingly bank on this outcome, with shares trading up to 4% higher since news of the lawsuit. The evolving web landscape poses financial incentives for media companies considering agreements with AI entities. As users increasingly access information without traditional web browsers, diminishing advertising revenue tied to search threatens companies reliant on ad-based models.

More than one-third of the Times’ web traffic originates from organic search, highlighting the risks of a drop in search-based revenue. Even if the Times settles, concerns persist about the livelihoods of work-for-hire artists, emphasizing the potential threats posed by AI companies hoovering up web content while making deals with major players.

“The New York Times is a very big fish in a small pond. On the other end are small creative professionals,” said Allen, underscoring the challenge faced by those lacking the ability to confront AI misuses of intellectual property.

Image By freepik

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