Inside the News Industry’s Uneasy Negotiations With OpenAI

For months, some of the biggest players in the U.S. media industry have been in confidential talks with OpenAI on a tricky issue: the price and terms of licensing their content to the artificial intelligence company.

The curtain on those negotiations was pulled back this week when The New York Times sued OpenAI and Microsoft for copyright infringement, alleging that the companies used its content without permission to build AI products.

The Times said that before suing, it had been talking with the companies for months about a deal. And it was not alone. Other news organizations — including Gannett, the largest U.S. newspaper company; News Corp., the owner of The Wall Street Journal; and IAC, the digital colossus behind The Daily Beast and magazine publisher Dotdash Meredith — have been in talks with OpenAI, said three people familiar with the negotiations, who requested anonymity to discuss the confidential talks.

The News/Media Alliance, which represents more than 2,200 news organizations in North America, has also been talking with OpenAI about coming up with a framework for a deal that would suit its members, a person familiar with the talks said.

Microsoft, which is OpenAI’s biggest investor and is incorporating OpenAI’s technology into its products, has held talks as well. “We’ve had thoughtful conversations with a number of publishers and look forward to future discussions,” said Frank Shaw, a spokesperson for Microsoft.

Companies like OpenAI and Microsoft have sought licensing deals with news organizations to train AI systems that can produce humanlike prose. Those systems in turn power applications like chatbots, from which the companies can gain revenue.

Nearly a dozen publishing executives and media business experts say the talks have been complicated by the rapid development of AI applications in the marketplace, which has raised thorny issues for the future of the media industry.

In a statement, OpenAI said that it respected the rights of content creators and owners and that it believed they should benefit from AI technology, citing its deals with The Associated Press and German publishing conglomerate Axel Springer.

“We’re continuing to have productive conversations with many of them around the world to discuss their questions about AI,” Kayla Wood, a spokesperson for OpenAI, said in a statement. “We’re optimistic we will continue to find mutually beneficial ways to work together in support of a rich news ecosystem.”

News publishers have had precarious relations with tech companies since losing much of their traditional advertising businesses to newcomers like Google and Facebook more than a decade ago, and publishing executives are wary of selling their content too cheaply.

“I think part of the reason news organizations are now looking so carefully at OpenAI is because they have 20 years of history indicating that if we’re not careful, we’ll give away the keys to the kingdom,” said Andrew Morse, publisher of The Atlanta Journal-Constitution, the flagship newspaper of Cox Media Group, which is not in talks with OpenAI.

There is also fear that AI applications may provide inaccurate information citing their articles, damaging the companies’ credibility.

“We’ve been through a period of a decade of misinformation and disinformation, and that was pre-AI,” said Ken Doctor, a media analyst and entrepreneur. “Now with AI on the scene, we are just at the dawn of the age where anyone has the ability to further and multiply misinformation and disinformation. And that, of course, terrifies news publishers.”

Still, some news organizations have struck deals. The agreement with the AP, announced in July, allows OpenAI to license the AP’s archive of news articles. The financial terms were not disclosed.

Axel Springer, whose holdings include Politico and Business Insider, went further: This month, it struck a multiyear deal that gave OpenAI access to its news archive and allowed the AI firm to use newly published articles in apps like ChatGPT. The deal, which includes a “performance fee” based on how much OpenAI uses its content, is worth more than $10 million per year, a person familiar with the agreement said.

Some media companies have decided not to prioritize commercial deals with OpenAI. Bloomberg, which has a vast data terminal business that uses artificial intelligence, is focusing on furthering its own AI efforts, according to a person familiar with the company’s strategy. The Washington Post has also not been in negotiations with OpenAI in recent months, a person familiar with the company’s efforts said.

Despite the tension between the news industry and OpenAI, some publishing executives struck a measured note on the potential upsides of AI. Jim Friedlich, CEO of the Lenfest Institute for Journalism, the nonprofit owner of The Philadelphia Inquirer, said news organizations and AI firms were “increasingly codependent,” since users wanted AI technology with reliable information.

“It’s important to all parties to achieve a settlement, and if possible that it be done quickly,” he said. “Whether that takes months or years is anyone’s guess.”

This article originally appeared in The New York Times .