Nandini Roy Choudhury, writer
Brief news
- San Francisco-based startup Story has raised $80 million in funding for its blockchain platform that aims to prevent AI manufacturers from appropriating intellectual property without consent.
- The funding round, led by Andreessen Horowitz, values Story at $2.25 billion.
- Story’s technology allows creators to prove ownership of their content and incorporate licensing fees and royalty-sharing arrangements into smart contracts, eliminating intermediaries and disputes over copyright theft.
Detailed news
Story, a San Francisco-based startup, announced that it has secured $80 million in funding for a blockchain that is intended to prevent artificial intelligence manufacturers, such as OpenAI, from appropriating the intellectual property of creators without their consent.
Sources familiar with the matter informed CNBC that the two-year-old company is valued at $2.25 billion as a result of the round. The information has not been disclosed to the public, and the sources preferred not to be identified.
According to Story, the funds were raised in a Series B round, which is typically the third significant round of funding in a private startup’s development journey after seed and Series A. The round was led by Andreessen Horowitz, which is also known as a16z.
Polychain, a venture capital firm that specializes in cryptocurrency, and Brevan Howard, the investment fund of British billionaire hedge fund manager Alan Howard, also participated.
The construction of a “IP Legoland”
A blockchain is a distributed database that preserves an immutable record of activity. Cryptocurrencies, including bitcoin and ether, are founded on this technology.
Story functions as a blockchain network that enables creators to demonstrate that they are the intellectual property owners of a piece of content by preserving their IP on the platform.
The company’s technology safeguards the intellectual property of individuals and entities by incorporating terms associated with it, such as licensing fees and royalty-sharing arrangements, into smart contracts.
Smart contracts are digital contracts that are autonomously executed upon the fulfillment of a specific set of conditions and are stored on a blockchain.
SY Lee, the co-founder and CEO of Story, elucidated to CNBC that this renders copyright holders’ intellectual property “programmable.” This is achieved by establishing guidelines for the use of their content and the cost associated with reproducing or remixing their works.
Lee explained that this has the advantage of eliminating the intermediaries that are frequently involved in disputes regarding copyright theft in the media industry.
Lee stated to CNBC, “It has now transitioned from IP to IP Lego.” “You are no longer required to consult with attorneys.” Passing through the agents is unnecessary. It is unnecessary to engage in this protracted business development negotiation. You merely incorporate your licensing and royalty-sharing terms into tiny contracts.
Story generates revenue by imposing a network fee on any transaction that transpires on its network.
Ablo, an AI tool that enables users to create their own custom-made fashion items using designs from household labels such as French designer apparel firm Balmain and Italian luxury fashion house Dolce and Gabbana, is an example of a company that employs Story.
Through a variety of licensing and revenue-sharing agreements, brands are reimbursed for the use of fashion designers’ intellectual property.
Combating the violation of copyright by artificial intelligence
Story is currently attempting to address a pressing issue with its technology: the thievery of copyrighted media on the internet by powerful generative AI models such as OpenAI’s ChatGPT.
These models, which are now being utilized as an alternative to search and fuel numerous AI chatbots, necessitate an extensive quantity of training data to enable their systems to generate sophisticated and informative responses to user inquiries.
However, the data that powers these AI models is frequently obtained from sources that are subject to copyright restrictions.
Microsoft was criticized by The New York Times last year.
and OpenAI with a copyright lawsuit seeking damages for the alleged exploitation of the newspaper’s intellectual property.
The Times included numerous examples of instances in which GPT-4 produced altered versions of material that was originally published by the newspaper in the suit.
Lee stated that large technology corporations, such as Microsoft, which has invested $13 billion in OpenAI and is reportedly entitled to a 49% stake in the company, are “essentially stealing your intellectual property for training purposes and actually capturing all the upside.”
In March, Microsoft filed a motion to invalidate a portion of the Times’ lawsuit, asserting that the claims were “unsubstantiated” and that the lawsuit presented a fraudulent narrative of “doomsday futurology.”
Microsoft’s attorneys contended that the content utilized to train these models “does not supplant the market for the works; rather, it teaches the models language.”
When CNBC inquired about Lee’s remarks, Microsoft was unavailable for comment.
Story’s Lee informed CNBC that the training of these AI models requires high-quality IP. However, he also stated that AI firms will suffer long-term repercussions if they fail to adequately compensate the publishers and creators from whom they obtain the enormous quantities of IP data.
“In order to achieve sustainable growth in AI, it is essential to have exceptional intellectual property.” “AI models will be unable to train themselves and improve themselves in the absence of exceptional human-generated data,” stated Lee.
There is a scarcity of enterprises that are developing technology that is specifically designed to combat IP infringement by AI.
Glaze, a University of Chicago project, provides a free app for artists to combat the theft of their intellectual property by AI tools. The app uses technology that makes subtle changes to artworks to disrupt AI models’ ability to read data on the works of art and mimic the style of the artwork and its artist.
Story, which was established in 2022, intends to allocate the additional funds toward the expansion of its IP network infrastructure and the recruitment of additional developer partners. The platform is currently utilized by more than 200 developers to facilitate the creation of content through the use of programmable IP.
Lee further stated, “There is a significant, remarkable digital renaissance that has enabled everyone to become a creator or studio. However, if the IP is not properly monetized and no one is compensating, it is a suicidal action for AI in the long term.”
Source : CNBC News
