Publishers are signing big-ticket deals with OpenAI, but at what cost?

In recent months, ChatGPT creator OpenAI has been showering the world’s largest news media companies with lucrative partnership agreements. The exact amount the company has spent padding the pockets of publishers is unknown but may well be in the billions.

News Corp., for example, which owns the Wall Street Journal, New York Post, and Sunday Times, inked a deal with OpenAI last month that is reported to be worth $250 million (€233.3m).

The Financial Times, The Atlantic, Associated Press, Dotdash Meredith — which owns People Magazine and Investopedia — and Axel Springer, which owns Business Insider and Politico, have all struck deals with the Microsoft-backed AI giant, too.

So what exactly is OpenAI buying? Well, it turns out that publications, especially their online archives, are great for training AI.

While much of this content can be obtained for free using a web crawler, that legally grey manoeuvre has so far exposed OpenAI to lawsuits.

These deals, therefore, could get the company out of a legal bind and be a bulwark against further copyright issues down the road.

Additionally, some of the deals permit OpenAI to feature news content in ChatGPT responses. That is likely meant to support a new “search” feature the company is working on, which, according to Bloomberg, would enable ChatGPT to search the web and cite sources when responding to a user’s prompt.

Great, you might say, OpenAI gets some fodder for its models, and the media receives a much-needed cash injection.

But news media companies have been burned by Big Tech before. And now they’re getting in bed with what could become the biggest, most disruptive tech company maybe ever, without knowing the wider impact AI could have on their businesses.

‘Help you help me’

Consider the effect that Google and Facebook have had on the press in the last two decades.

On the one hand, these platforms have done news businesses a tremendous service. Search and social media platforms now drive the lion’s share of traffic to most news sites.

According to Google’s VP of Government Affairs and Public Policy, Cris Turner, “our products link people to publishers’ websites more than 24 billion times each month — for free — and we offer subscription tools and ad technology to help publishers monetise this traffic.”

At the same time, Google’s dominance in digital advertising – or their alleged monopoly, if you’re the US Justice Department – has dried up advertising revenues for publishers. That has, in no small part, fueled a decades-long wave of consolidation and contraction among news businesses globally.

Many are often surprised to learn how rapidly news outlets, especially local ones, are disappearing. According to Northwestern University’s Medill School of Journalism, newspapers in the US are folding at an astonishing rate of 2.5 per week as of 2023. News businesses are disappearing across Europe, too, and that has a lot to do with falling ad revenues.

In the UK, for example, the market for newspaper advertising was worth just £241m (€284.7m) last year, down from £2.5 billion (€2.95bn) in the 2000s, when platforms like Google and Facebook were still nascent.

So, you have to wonder, will AI have the same effect on the press as Google?

Do the right thing, make the right bet

Perhaps not. With Google and Facebook eating up so much of the industry’s ad revenues, publications have had to reorient their business models around other sources of income, like subscriptions and even donations.

The Guardian, for example, earns a majority of its US revenue from readers’ gratuities. Presumably, that income, unlike advertising, would be harder for AI companies to siphon off, even in a world where ChatGPT usurps Google as the front door to the internet.

Then again, so much about how AI will change journalism is unknown. What if people start getting their news directly from ChatGPT? It’s not hard to imagine a world where that platform curates news for us and — to the chagrin of this opinion writer — can pen pithy commentary on current affairs. If that were to happen, would digital newspaper subscriptions wane?

And will OpenAI’s partnership money be enough to keep publications afloat? Better yet, what will become of those news businesses that haven’t been offered licensing deals by OpenAI?

Maybe, then, the press shouldn’t take OpenAI’s money after all. Perhaps news media businesses should instead follow the New York Times’ lead and sue OpenAI for using their content without compensation.

Or, perhaps they should wait for governments to intervene with something like Canada’s Bill C-18 or Australia’s News Media Bargaining Code, both of which were semi-successful attempts to force Big Tech to compensate journalists for using their content.

But sitting around and waiting while your competitors ink lucrative deals with OpenAI is hardly good business. Hence, you can’t really fault media companies for taking the money.

“I’m absolutely convinced these deals can be beneficial if we’ve learned the right rules, structure them the right way, and hedge our bets. The lesson of the last decade for media isn’t to avoid the tech platforms — it’s to make the right deals and the right bets,” wrote Nicholas Thompson, CEO of the Atlantic, in a LinkedIn post.

Yet somehow, history feels ill-equipped to teach us much about the current moment.

AI’s limitless uncertainty seems to dwarf every historical comparison, Google, Facebook, or otherwise.

So, let’s hope, for the good of the press and all the things that rely on it — civic life, democracy, and so on — that Mr Thompson and all the other media execs signing big deals with OpenAI are indeed making the right bet with Big Tech this time around.

Jonah Prousky is a Canadian freelance writer based in London. His work has appeared in several leading publications including the Canadian Broadcasting Corporation (CBC), Toronto Star, and Calgary Herald.

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