We’ve seen a few intriguing new developments over the past few days regarding GenAI and money.  

News publishers have signed up for two different sorts of revenue-sharing programmes run by tech companies.

Perplexity AI

The first is run by Perplexity AI, a generative AI company that first received rave reviews and then faced accusations of plagiarism. It uses conversational AI to synthesise and summarise articles from the Web in real time rather than offering a list of links to those sites. It plans to launch a new advertising feature by October that lets advertisers recommend follow-up questions along with each answer displayed.

Brands such as Der Spiegel, WordPress, and the not-for-profit Texas Tribune have signed up for a “double-digit percentage” share of revenue that is generated every time a user asks Perplexity a question and it cites one of the publishers in the answer. They get paid per article cited.

The company plans to have 30 publishers enrolled by the end of the year, and it is looking to partner with some of the publishers’ ad sales teams. The news organisations will have access to data on which queries are surfacing their content and driving revenue.

(This is different from the agreements that have been signed previously with Google and OpenAI because this is a revenue-sharing deal rather than a licensing deal that covers archival content for training purposes and does not focus simply on big publishers.)

Prorata.ai

The second agreement is between some of the biggest names in the business — Financial Times, Axel Springer, The Atlantic, to name a few — and an AI start-up that most people have never heard of, Prorata.ai, which is launching a subscription AI chat product over the next couple of months.

“ProRata’s technology enables generative AI platforms — for the first time — to accurately attribute and share revenues on a per-use basis with content owners. The company’s attribution technology will protect and reward creators while preventing unreliable content from driving AI answers,” according to the company.

The company promises publishers and authors a 50/50 revenue-share and a chance to monitor how AI systems are using their work. It uses multi-dimensional attribution algorithms to determine the fractional contribution of content used to generate a response, and covers generative text, images, music, and video. This could eventually be licensed to bigger AI firms, such as OpenAI, and to marketplaces such as Tollbit that bridge the gap between AI firms and publishers.

Money concerns

These two agreements come as many investors raise concerns about whether all the money pouring into GenAI at tech companies will ever be recouped — and which companies will still be serving clients a few years from now. 

You’ve read about it here, at INMA, before. Now, the Information reports OpenAI is set to burn US$5 billion this year. Goldman Sachs points out AI capex will cross US$1 trillion in coming years, with few tangible results.

“AI technology is exceptionally expensive, and to justify those costs, the technology must be able to solve complex problems, which it isn’t designed to do,” said Goldman’s Jim Covello. He is skeptical AI’s costs will ever decline enough to make automating a large share of tasks affordable.

“In the 18 months since ChatGPT kicked off an AI arms race, tech giants have promised that the technology is poised to revolutionise every industry and used it as justification for spending tens of billions of dollars on data centers and semiconductors needed to run large AI models. Compared to that vision, the products they’ve rolled out so far feel somewhat trivial — chatbots with no clear path to monetisation, cost saving measures like AI coding and customer service, and AI-enabled search that sometimes makes things up,” writes Claire Duffy at CNN Business. 

“In short, investors’ fears can be boiled down to: Is all of this actually worth anything? Or is it just another shiny object the industry is chasing to bring back its dreams of endless growth before it abandons it and moves onto the next big thing?”

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