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

Other news

Deal flow

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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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