OpenAI’s mega WSJ licensing deal could reshape news as publishers choose sides on AI
Good night, and good luck… ChatGPT’s about to consume a lot more articles about ChatGPT. Wall Street Journal owner News Corp and OpenAI sealed what appears to be the largest AI news-licensing deal ever, said to be worth $250M+ over a half decade. The partnership will give OpenAI the right to use articles from News Corp brands (like WSJ, MarketWatch, New York Post) to answer user questions and train its bots. It’s the latest example of the beleaguered news industry warming up to Big Tech.
Fit to print: OpenAI’s made similar licensing deals with publishers including Axel Springer (Business Insider, Politico), IAC’s Dotdash Meredith (People), and the Associated Press. Google’s reportedly paying small outlets to produce articles with AI.
Counterpoint: Publishers including The New York Times and the Chicago Trib have sued OpenAI and Microsoft over copyright infringement. ~90% of major US news outlets have installed blockers to prevent their sites from being crawled for AI training.
We’ve read this before… Silicon Valley’s penchant for pivoting can upend mastheads (nearly 3K newspapers have closed or merged since 2005). For years, newsrooms have been at the whim of algorithmic shifts by Meta and Google, which’ve dramatically affected web traffic. Before AI news-licensing deals, there were social-media deals. In 2019, Meta launched Facebook’s News tab, signing content partnerships with publishers like the WSJ. Then it scrapped them in a pandemic switch to creator content, pulverizing its $2B news budget by 95%. Now Meta’s said to be considering news deals once again — this time for AI-training data.
AI needs news… To make their AI search tools useful, Google and OpenAI need access to accurate and up-to-date info. By negotiating with publishers, they may be trying to avoid legal fallout before copyright lawsuits set a precedent. (By one estimate, The Times may be seeking $450B in damages.) But publishers like News Corp, which cut 1.2K staffers last year, are hoping to get ahead of the AI shift before it gets ahead of them.