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TechCrunch Disrupt Berlin 2019 - Day 2
Cloudflare cofounder and CEO Matthew Prince (Noam Galai/Getty Images)
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Could Cloudflare’s “pay per crawl” save news from AI?

The novel plan would let publishers control AI bot access and collect micropayments to access content.

Jon Keegan

AI is eating the news.

Publishers large and small are bracing for a grim reality that is starting to reveal itself: as readers increasingly turn to AI chatbots like ChatGPT for their queries, or skim over Google AI overviews, news publishers are seeing visits from search engines drop off a cliff.

AI companies have slurped up billions of web pages to train their models and fetch query results. Big publishers like The New York Times have filed suit against OpenAI and Microsoft, accusing the companies of stealing its content without permission or compensation. Many publishers have opted to cut deals with AI companies to license their work and appear in results.

While many of today’s chatbots surface citations with links in query responses, it generates a fraction of the traffic that traditional search engine results saw (and that was already in decline).

An unlikely company is stepping in with a novel solution to this problem that could provide a way for AI companies to crawl a publisher’s website with permission and pay for the access.

Cloudflare is a content delivery network — it ensures that customers’ websites, images, and videos will be accessible quickly around the world, sitting between the publisher and the web traffic hitting its site. That gives Cloudflare the unique ability to control who gets to see the content that it’s distributing. And while individual website owners can try to block AI bots from scraping their sites, Cloudflare can do it for billions of web pages at a time across 125 countries. The company says it serves about 20% of the web.

Cloudflare is introducing an experiment that it’s calling “pay per crawl,” which acts as a gatekeeper (and a toll booth) for AI bots crawling the web. Here’s how it works:

  • Cloudflare detects traffic that is coming not from a human user, but from an AI crawler.

  • Depending on a publisher’s choice, the “pay per crawl” system controls access to the site.

  • The AI bot can be allowed to access the site for free, it can pay to access the site, or it can be blocked altogether. Publishers can also tailor this to specific companies.

  • Cloudflare collects a micropayment from the AI bot, which it passes along to the publisher.

The pay per crawl plan is currently in private beta, and the company has also announced that all new Cloudflare customers will be set to block AI bots by default.

Cloudflare cofounder and CEO Matthew Prince wrote in a blog post declaring “Content Independence Day”:

“Instead of being a fair trade, the web is being stripmined by AI crawlers with content creators seeing almost no traffic and therefore almost no value. That changes today, July 1, what we’re calling Content Independence Day. Cloudflare, along with a majority of the world’s leading publishers and AI companies, is changing the default to block AI crawlers unless they pay creators for their content. That content is the fuel that powers AI engines, and so it’s only fair that content creators are compensated directly for it.”

The rub is that both AI companies and publishers need to opt in to the plan for payments to be processed, but several big publishers have signed up, including Condé Nast, Time, Associated Press, and The Atlantic, according to TechCrunch.

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Microsoft considers suing Amazon and OpenAI over $50 billion deal

Microsoft may be about to take its biggest AI partner to court, the Financial Times reports.

Microsoft, a longtime backer of OpenAI, is weighing legal action over the latter’s $50 billion deal with Amazon tied to its new Frontier AI product, arguing it could violate a key clause in their exclusive cloud deal requiring OpenAI’s models to run through Azure. Amazon and OpenAI say they’ve found a workaround. Microsoft executives disagree.

“We know our contract,” a source told the FT. “We will sue them if they breach it. If Amazon and OpenAI want to take a bet on the creativity of their contractual lawyers, I would back us, not them.”

OpenAI, which is eyeing an IPO this year and under pressure to generate more revenue, is trying to loosen Microsoft’s grip as it scales, while Microsoft increasingly sees OpenAI as both a partner and competitor.

“We know our contract,” a source told the FT. “We will sue them if they breach it. If Amazon and OpenAI want to take a bet on the creativity of their contractual lawyers, I would back us, not them.”

OpenAI, which is eyeing an IPO this year and under pressure to generate more revenue, is trying to loosen Microsoft’s grip as it scales, while Microsoft increasingly sees OpenAI as both a partner and competitor.

tech

Morgan Stanley says robotaxis could help Tesla sell more cars

Morgan Stanley analysts think Tesla’s robotaxi push could boost more than just a new business line — it could help sell more cars and software, too.

After visiting Giga Texas, analysts said they’re more optimistic about Tesla’s progress toward an unsupervised robotaxi rollout, with improvements in tricky pickup and drop-off scenarios where Tesla doesn’t have as much data from consumer usage. For now, the vast majority of its vehicles still have human supervisors in the front seat, but the analysts say the service is helping Tesla.

“Incremental unsupervised robotaxi miles driven improve the underlying autonomy model, which accelerates the path to personal unsupervised FSD [Full Self-Driving]. This, in turn supports higher FSD attach rates, improves auto demand, and cash flow generation.”

In other words, the more robotaxis drive, the better Tesla’s self-driving gets — and that could make its Full Self-Driving software more appealing and its cars easier to sell, in addition to improving its robotaxi service. Note that Tesla’s vehicle deliveries, which accounts for the lion’s share of the company’s revenue, have dropped two years in a row.

Morgan Stanley also sees a cost advantage. It estimates Tesla’s robotaxis could cost about $0.81 per mile to run today — cheaper than traditional ride-hailing and rival autonomous services — with costs falling further as purpose-built vehicles like the Cybercab scale.

Morgan Stanley maintained its equal-weight rating and $415 price target, about 4% above where the stock is currently trading.

$600B

Amazon CEO Andy Jassy told employees at an all-hands meeting on Tuesday that he sees AI growing AWS sales to $600 billion a year by 2036, Reuters reports — double his prior estimate and more than 4x last year’s revenue.

Shares of Amazon, which were already up for the day, moved modestly higher on the heels of the report.

tech

OpenAI snags Amazon AWS deal for classified government work with Anthropic pushed aside

Following Anthropic being deemed a “supply chain risk” to national security, the field is clear for OpenAI. The Information is reporting that OpenAI just landed a deal with Amazon AWS to sell its AI services to government employees for both classified and unclassified work.

Previously, OpenAI was contractually obliged to use Microsoft Azure cloud hosting for the government contracts it handled as part of its $13 billion deal with the software giant, but since it restructured as a for-profit public benefit corporation and renegotiated the terms of the deal, OpenAI is free to use AWS, which is more commonly used in government work.

According to the report, contracts that sell AI services through another company like Amazon can be much larger then direct contracts with the government, which is crucial for OpenAI as it chases the success that Anthropic has had with enterprise customers.

Previously, OpenAI was contractually obliged to use Microsoft Azure cloud hosting for the government contracts it handled as part of its $13 billion deal with the software giant, but since it restructured as a for-profit public benefit corporation and renegotiated the terms of the deal, OpenAI is free to use AWS, which is more commonly used in government work.

According to the report, contracts that sell AI services through another company like Amazon can be much larger then direct contracts with the government, which is crucial for OpenAI as it chases the success that Anthropic has had with enterprise customers.

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