ChatGPT’s parent OpenAI will generate $1 billion in revenue over the coming year, the Information reports. The Microsoft-backed uber-unicorn is already banking $80 million a month.
I recently predicted Microsoft’s valuation will rocket to $4 trillion, and warned news media that the window to do a deal was closing.
Today, while they brief lawyers on copyright theft, Supervised reports how OpenAI is hauling ass to commercialising it.
It’s the Big Tech playbook: Bank on Governments being too soft and courts too slow.
Search
When Google emerged in early 2000s, it promised search to make publishers’ content more discoverable. The Don’t Be Evil mantra then disappeared as trillions rolled in. News media realised too late their ads business was being syphoned off by a trillionaire paperboy, leaving them a pauper.
Social
When Facebook launched in 2004, it friended news media promising them access to youth. That collaboration was a lie too. Now Meta ruthlessly blacklists news in any country that challenges its business model, even when lives are at risk.
Programmatic
When Google automated advertising, it promised to cut publishers’ costs and maintain ad yields. It then collapsed ad yields and diverted traffic to its own properties, shackling publishers with lower prices and sell through.
Avoiding the same outcome with AI requires courage to act fast, based on four undeniable truths.
Tech companies need news because it trains their AIs. Everything already on the web has been lost, but everything from today forward remains valuable. Microsoft, Google, Apple and Amazon cannot afford to lose the AI arms race, so news has value. For now. Go fast, and that’s opportunity number one.
The consumption of news, video and audio are rising, because five billion people demand it. The media boom feels like a bust because the business model is broken. It’s a classic market failure. Make a strong business case, and that’s opportunity number two.
Big Tech companies have the cash and need the content. Media has the content and needs the cash. Prove the correlation and crack that supply and demand goldmine is opportunity three.
Bickering and court cases are slowing the path to the future - for everyone. Big Tech are seeing regulators becoming heavy handed and fines rise. A sustainable coexistence between news media and Big Tech is therefore a better business model than the status quo. That’s opportunity four.
Achieving it requires news media to step up, show courage, fearlessly make a considered case and to do it fast.
Here are four business models that can work.
Big Tech pays news media when their AIs reference their news content on a per-use basis. Every AI response that uses publisher content spawns a micro-payment. Microsoft provided a handy pricing model for this. *Tech guys will tell you that this isn’t possible because of the way that AI’s ‘predict the next word’ but this is wrong, and I will share how to do it in a post shortly.
Big Tech starts buying news media. Amazon’s Jeff Bezos acquired The Washington Post and Disney spent $8 billion buying Marvel, Star Wars and National Geographic to boost Disney+. A few billion dollar investments is good business to support multi-trillion dollar AI ambitions.
Big Tech invests in news media. Big Tech needs news media to provide its content in a format its AIs can use. That creates a new industry around AI Optimisation that news media is deal for. This will be a new billion dollar industry.
Each of these enable journalists to earn money and keep the important work of journalism relevant in an AI future, but time is running out. Action is required today.
News media’s 20 years of failure can’t end unless change starts.
First published in Future Media
By Ricky Sutton
Founder of OOVVUU
Marcus Gordon
