Could AI companies actually “save” journalism from Google?

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Last December, The New York Times (NYT) threw down the gauntlet against AI firms who train their large language models (LLMs) on freely available news stories. They filed a lawsuit against Microsoft and OpenAI, asking for billions of dollars in damages.

This case is a doozy. Microsoft and OpenAI aren’t denying that AI accessed the NYT, nor that OpenAI is giving results that directly mirror their content. Instead, it’s arguing that use of the publication’s stories constitutes “fair use,” which allows copyrighted material to be used verbatim when it involves comment, criticism, news reporting, teaching, scholarship, and research.

This argument has worked in the past in other high-profile copyright cases, including Betamax’s battle with Sony as well as Google’s fight with book publishers.

The NYT vs. Microsoft and OpenAI case has the potential to severely affect how AI firms are allowed to train their LLMs.

But while there were plenty of headlines focusing on the impending fight between these giants, another story seems to have flown under the radar. In early December, Microsoft and Axel Springer, which owns Business Insider and Politico, reached a licensing deal that allows Microsoft to use Business Insider to train its LLMs.

The terms of the deal are unknown, but Bloomberg estimates the deal to be worth 10 million euros (about US$10.8 million) or more.

But not everyone is convinced this is a good idea. Just ask the Business Insider’s staff who were cut last Thursday, just six weeks after the deal. While Business Insider did not directly mention the OpenAI deal as the reason for the layoffs, comments from CEO Barbara Peng seem to indicate that it was a factor.

But in the long term, there is an upside. Media insiders that I spoke to acknowledge that this actually provides a new stream of revenue for media companies.

That’s no small victory for the media industry, which is still facing massive layoffs on a regular basis.

Whether or not other companies will sign similar deals with Microsoft (or other AI firms) will be a closely watched development, but it’s clear the media sector has seen the writing on the wall. According to Wired, 88% of major media companies are currently blocking the web crawlers that AI companies use to find and access news.

But there are also long-term challenges, especially if the strategy of licensing content turns out to be successful, some executives say.

If readers start relying on AI apps for their news – and there are already indications that this could become a thing – media houses could see a fall in subscriptions. That could lead to a situation where media sites are more beholden to tech companies for their revenue than they are to readers.

See also: This Hong Kong startup develops AI to help banks find dirt on SMEs