News Corp has built a moat to protect itself from AI pirates wanting to take its premium content without paying.
At a briefing post News’ December quarter results, CEO Robert Thomson, faced investment bank analysts.
David Karnovsky, of JP Morgan, pointed to market reaction to the perception of AI and asked what that was going to mean for companies that operate in the business services and data spaces.
AI company Anthropic last week released tools to help with workflows, sparking a sell off on the stock market.
On Friday, News Corp closed down more than 5% at $38.320 following its latest results.
Earlier in the week it was at more than $44.
“There is a fundamental misconception about the impact of AI on News Corporation,” Thomson said.
“AI is retrospective and synthesises generic content, sometimes imperfectly, but is past tense, often past imperfect.
“We have contemporary, creative, proprietary content, which is only accessed if AI companies pay us."
News Corp has a woo or sue strategy. Either pay for the content or face court.
“We’ve been consciously building a moat, and it is a moat with saltwater crocodiles, with sharks, and even more dangerous species, lawyers,” Thomson said.
“More importantly, the moat separates commodity content from our premium.
“Anthropic is already set to pay out $US1.5 billion for inappropriate use of pirated books, and we and our authors will get a large chunk of that money later this year.”
Anthropic has agreed to pay $US1.5 billion to settle claims by authors, including many Australians, that it downloaded pirated books to train its machine brain.
Other AI companies have come to terms with publishers.
News Corp has a partnership with OpenAI whose expertise will enhance “our editorial, business, and real estate products, while our editorial will enhance OpenAI products."
“It is worth remembering that AI models need data, otherwise they are just lines of inert code,” he said.
“They need real-time, real-world data, and that’s what we produce every single minute of every single day. Without compelling content, these AI operators are not omnipotent, they are not unique, they are eunuchs.”
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