Gen AI companies will pursue licensing agreements with content rights holders for AI training data — here’s how deals could unfold.
Licensing is likely to become a more common occurrence between generative AI developers and rights-holding content companies. That’s even in the unlikely event AI companies sweep numerous pendingFirst, it’s not guaranteed that all applications of gen AI systems will be deemed legal under the U.S. Copyright Act.that claim copyright infringement, generative AI companies have argued that training their models with copyrighted works qualifies under the Copyright Act’s fair use exception.
Customers of generative AI software want assurances now that they can leverage AI models without legal liability. Authorized training datasets with documented and traceable provenance stand out as the quickest path to providing that assurance. The ability to leverage output without legal liability remains an ongoing concern for generative AI customers. A collective or compulsory model would likely treat only training data. By contrast, both forms of direct licensing — and to a certain extent, a judicial settlement — would more readily offer AI companies an opportunity to negotiate with rights holders and secure rights holder-approved guidelines for AI model users who want to leverage generated output.
One-to-one direct licensing lacks transparency and can act as a barrier to entry by limiting buying opportunities for less economically advantaged developers. In contrast, collective and compulsory license models provide more balance in pricing, transparency and equitable treatment for various classes of both AI companies and rights holders.
While they work toward establishing licensing standards in whatever form they may take, stakeholders can take the following steps:Companies offering commercial AI products and seeking market share should at least explore limiting their operations to models trained on authorized content with documented and traceable provenance.
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