AI Startup Story Raises $80 Million to Combat Copyright Theft by Generative AI Models
San Francisco-based startup Story has secured $80 million in funding to build a blockchain designed to prevent artificial intelligence (AI) companies from using creators’ intellectual property (IP) without permission. This Series B round, led by Andreessen Horowitz (a16z), values Story at $2.25 billion. The company’s technology tackles a growing concern: the unauthorized use of copyrighted material by powerful generative AI models like OpenAI’s ChatGPT. Story is building an "IP legoland" where creators can control their content’s use and earn compensation.
Key Takeaways:
- Story’s blockchain allows creators to prove ownership and set licensing terms for their work. This enables "programmable IP," eliminating the need for lengthy negotiations and potentially saving creators from copyright infringement.
- The platform tackles the issue of generative AI models using copyrighted data for training without compensation to creators. This has become a major concern as AI models are increasingly used for various tasks, including content creation and information retrieval.
- Story’s technology aims to ensure fair compensation for creators while helping ensure the sustainability of AI development. The company argues that AI models require high-quality, human-created data to function effectively.
Building an "IP Legoland"
Story functions as a distributed database that utilizes blockchain technology. This allows creators to store their IP on the platform, proving ownership and establishing clear terms for its use. The platform uses smart contracts, digital agreements stored on the blockchain, to automatically enforce licensing fees, royalty-sharing arrangements, and other conditions. This "programmable" nature of IP eliminates the need for intermediaries like lawyers and agents, streamlining the process of copyright management and enforcement.
Story generates revenue by charging a network fee for every transaction on its platform. One example of a company using Story is Ablo, an AI tool that enables users to create custom fashion items using designs from brands like Balmain and Dolce & Gabbana. Ablo compensates these brands through licensing agreements and revenue-sharing arrangements, ensuring that designers are fairly compensated for their IP.
Fighting AI Copyright Theft
Generative AI models like ChatGPT require vast amounts of data to train and generate outputs. This data is often sourced from copyrighted content, leading to concerns about IP theft and unfair compensation. The New York Times famously sued Microsoft and OpenAI in 2023, alleging that GPT-4 used the newspaper’s content without permission.
Story argues that AI companies like Microsoft, which has invested billions in OpenAI, are "essentially stealing your IP for training purposes and actually capturing all the upside." While Microsoft claims that AI models learning from copyrighted data does not harm the market for the original works, Story highlights the importance of fair compensation to incentivize creators and ensure the sustainability of AI development.
"You need great IP going into AI to have a sustainable growth in AI," said Story CEO SY Lee. "Without great human-created data, AI models are not going to be able to train themselves and improve themselves."
The Future of AI and Copyright
The rise of AI and its dependence on massive datasets raises ethical and legal questions regarding copyright ownership and use. While Glaze, a project from the University of Chicago, offers artists a free app to protect their work by subtly altering it to disrupt AI model analysis, Story presents a broader approach aimed at establishing a new paradigm for IP management in the AI age.
Story’s mission is to create a more equitable system for creators, allowing them to control and monetize their work while fostering a healthy ecosystem for AI development. The company’s $80 million funding signifies investor confidence in this approach, suggesting a growing awareness of the importance of addressing IP theft in the burgeoning AI landscape. As AI technology continues to evolve, solutions like Story’s will be crucial for balancing innovation with the protection of creators’ rights.
