As Publishers Seek AI Payments, AP Gets a First-Mover Safeguard
When the Associated Press was negotiating an agreement to license its content to generative-AI company OpenAI, the newswire giant had a hesitation: What if another publisher comes along and strikes a more lucrative deal? The AP built in a first-mover safeguard, often referred to as a “most favored nation" clause, that gives it the right to reset the terms if another company gets a better deal from OpenAI, according to people familiar with the agreement. News organizations are still in the early stages of evaluating generative AI tools from companies including OpenAI, Microsoft and Google, which are trained on vast amounts of internet data, including news articles. Several publishers are seeking payments for the use of their content.
With no precedent in the industry, determining the fair value of what they produce isn’t straightforward. The AP was the first major publisher to strike a pact with a major AI platform, and its favored nation clause reflects the uncertainty in the industry about how much news content is worth to AI bots. The AP didn’t disclose the terms of its deal.
“AP refrains from discussing the details of its business arrangements," a company spokeswoman said. OpenAI declined to comment. The phenomenon of generative AI, unleashed by OpenAI’s sophisticated chatbot ChatGPT, has shaken up big technology companies and threatens to transform publishers’ business models, which are largely reliant on revenue from advertising and subscriptions.
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