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AI is the media's latest frenemy
The complex relationship between the media industry and AI, the Microsoft-Inflection $650M deal is cleared by UK regulators, and more...
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Without further ado, let’s get into today’s issue…
Today, we’ll look at how AI is the media industry’s latest frenemy. Plus the top tech news you need to know from this week.
Let’s go 👇
This week’s insight
Media organizations have historically been influenced by big tech giants like Google and Meta because, in the 21st century, they have largely dictated how information is discovered and distributed.
Google’s dominance over search made it a vital advertising partner to media companies adjusting to the rise of the internet. Meta initially benefited news outlets by allowing millions of people to easily share articles on its platforms.
The media industry’s conflict with big tech
However, earlier this year, Meta removed its Facebook News tab for US and Australian users and stopped paying publishers for articles. Meanwhile, Google’s AI Overviews could be another blow to the media industry, as they summarize information rather than link readers to the original site material.
The answers provided by AI tools like OpenAI’s ChatGPT, Anthropic’s Claude, and even Meta AI, rival — and sometimes — replicate news articles, leaving publishers fearful of losing readers and critical ad revenue.
How media companies are adapting
To adapt, roughly 20 publishers have signed lucrative licensing deals with AI companies like OpenAI, Perplexity AI, and even Google, embracing the philosophy of “if you can’t beat ‘em, join ‘em.”. These agreements allow AI models to train on publishers’ content in exchange for licensing money along with citations and links back to original articles.
A few of the 20 publishers include New Yorker-owner Condé Nast, Time, The Wall Street Journal-owner News Corp, and The Atlantic.
OpenAI leads the way in media partnerships as you can see from this graph:
A graph showing the breakdown of licensing agreements between AI/tech companies and media publishers.
Some media companies are fighting back
Other publishers, however, are taking legal action against AI companies. With chatbots skirting paywalls to train on and pull direct content from news articles, some outlets have alleged plagiarism and copyright infringement.
A group of newspapers owned by hedge fund Alden Global Capital, which includes the Chicago Tribune and the New York Daily News, is suing OpenAI and its biggest backer, Microsoft, for up to $150,000 in damages per article taken by their ChatGPT and Copilot chatbots.
The media’s complex relationship with AI
The relationship between the media and AI is definitely complex. Even The New York Times, while suing OpenAI for copyright infringement, has an agreement allowing its newsroom to experiment with the startup’s AI tools. This highlights the media industry’s struggle to adapt to yet another technological disruption…
Bottomline
As the media landscape evolves, it’s clear that AI will play a significant role. The challenge for publishers lies in harnessing its benefits while protecting their content and revenue streams. The coming years will likely see continued experimentation as the industry navigates this new frontier.
Top news
UK antitrust regulators clear the Microsoft-Inflection AI deal. For context, Microsoft announced earlier this year that it would hire Inflection AI co-founder Mustafa Suleyman and most of his staff along with paying for its intellectual property in a deal worth $650M.
Earlier this week, Nvidia was reported to have received a subpoena from the U.S. Department of Justice for an antitrust investigation, but the company has denied these claims, stating it has not received any formal subpoena.
Y Combinator co-founder Paul Graham publishes a blog post called ‘Founder Mode’ which advocates for founders to trust their instincts and stay deeply involved in their businesses, as they did in the early days. He contrasts this with "Manager Mode," which promotes delegation and a focus on broader strategies.
Other news
Elon Musk’s X launches X TV, a new video app in beta for internet-connected TV screens as the company tries to revitalize its struggling ads business.
A16z shuts down its satellite office in Miami Beach just 2 years into a 5-year lease it signed for an 8,300-square-foot space.
The first reviews of ChatGPT’s Google Search rival, SearchGPT, are in and they’re a mixed bag. Reports from early users say the tool sometimes provides inaccurate or hallucinated information. Google’s throne may be safe… for now.
Microsoft business customers pause its Office AI assistant for Excel, PowerPoint, Word, and other apps because it hasn’t delivered enough benefits to justify its costs.
Nvidia is hit with a DOJ subpoena as part of an antitrust probe. The US Dept of Justice is concerned Nvidia is abusing its market dominance by retaliating against firms that use hardware from other providers.
Lyft is restructuring its micromobility business, laying off about 30 employees and incurring $34 million to $46 million in charges. The changes include rebranding to Lyft Urban Solutions and ending dockless rides in favor of docked options.
Apple to switch to OLED-displays for all upcoming iPhones from 2025 and beyond.
Deal flow
Safe Superintelligence Inc., the secretive AI safety lab started by OpenAI co-founder Ilya Sutskever, has raised $1B.
Salesforce has acquired a New Jersey-based data management firm Own for $1.9B in cash.
Uber is raising money through the US bond market with a 3-part, $4B offering, using the proceeds to pay off $2B in outstanding debt and $1.5B in 8% senior notes that mature in 2026.
Verizon plans to acquire Frontier Communications in an all-cash deal valued at $20B deal to boost its fiber network.
Revefi, a Seattle, WA-based data ops automation startup, raised a $20M Series A round.
You.com, an AI search and productivity platform, raises a $50M Series B round which brings its total funding to $99M.
DubClub, a Chicago, IL-based platform for people to consume, discuss, and buy premium sports content from creators, raised a $7.5M Series A round.
TikTok’s parent company ByteDance increased its share price in its latest employee buyback, which lifted its valuation close to $230B.
Salesforce agreed to acquire GenAI voice agent developer Tenyx for an undisclosed amount.
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That’s it for this week. I hope it was insightful. As always, let me know what you think and if you have any questions. Cheers!
🌜 Loryn and Nicole from Dark Mode Digest
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