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1
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· Posted on
May 27, 2024

News Corp goes from calling OpenAI "thieves" to partnering up in a $250 million USD deal

News Corp has announced a deal with Open AI, which will give it access to all of News Corp's major news publications worth $250 million.

What's the key learning?

  • Large media organisations like News Corp and Nine are fighting with Meta over compensation for using their content.
  • Now we’re starting to see it in the AI space to an even greater extent because, AI platforms are literally training their AI models off this content.
  • $50 million USD per year feels kinda small, considering OpenAI is literally building its business of this type of content, but in News Corp’s view, it’s better than getting nothing.

👉 Background: News Corp is the media giant that is based in the US, and majority controlled by Rupert Murdoch and his family. News Corp owns a whole host of publications worldwide, including Herald Sun, The Australian, and a big chunk of Foxtel in Australia.

👉 What happened: News Corp has announced a deal with Open AI, which will give it access to all of News Corp's major news publications for a reported $50 million USD per year...over five years.

👉 What else: This is a bit of a plot twist because just a few months ago, News Corp's CEO called AI platforms "thieves and counterfeiters" for training their models on media content without consent from the publishing companies.

What's the key learning?

💡 Sometimes doing a bad deal is better than doing no deal at all. Right now, many publishers are in poor negotiation positions with tech leaders like Google, Meta, and of course, Open AI.

💡There's been a major shift in power from creators, like News Corp, to distributors like big tech companies. We've already seen this shift through the Media Bargaining Code.

💡Now we're seeing this power dynamic in the AI space too. Open AI has signed deals with The Associated Press, Axel Springer, Reddit, and now News Corp. However, with this deal, News Corp could be signing its own death warrant in exchange for short-term survival.

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