OpenAI’s Partnerships with News Media: A New Era or a Risky Gamble?

OpenAI’s Lucrative Partnerships with News Media Giants

In recent months, OpenAI, the creator of ChatGPT, has been actively engaging in lucrative partnership agreements with some of the world’s largest news media companies. While the exact financial commitment remains undisclosed, estimates suggest that the total expenditures could reach into the billions. A notable example is News Corp., the parent company of the Wall Street Journal, New York Post, and Sunday Times, which recently finalized a deal with OpenAI worth approximately $250 million (€233.3m).

Other prominent publications such as 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 also entered into agreements with the Microsoft-backed AI firm.

What is OpenAI Gaining?

So, what exactly is OpenAI acquiring through these partnerships? The answer lies in the fact that online archives of these publications are incredibly valuable for training AI models. While much of this content could theoretically be accessed via web crawling techniques, such actions have historically placed OpenAI in legally precarious positions, opening the door to lawsuits. Thus, these agreements not only mitigate potential legal issues but also fortify the company against future copyright challenges.

Moreover, some of the deals grant OpenAI the right to display news content in ChatGPT responses. This move likely supports a forthcoming “search” feature that the company is reportedly developing, which, according to Bloomberg, would allow ChatGPT to scour the web and cite sources when responding to user inquiries.

The Press and Big Tech: A Complicated Relationship

At first glance, this appears to be a mutually beneficial arrangement: OpenAI gains a rich source of information for its models, while media companies receive much-needed financial support. However, the history of news media partnerships with tech giants like Google and Facebook casts a shadow of doubt over the sustainability of such relationships.

• On one hand, platforms like Google and Facebook have significantly boosted traffic to news websites. According to Cris Turner, Google’s Vice President of Government Affairs and Public Policy, “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 monetize this traffic.”
• On the other hand, the digital advertising dominance of Google has severely curtailed advertising revenues for publishers, leading to a wave of consolidation and contraction in the industry.

Many are often surprised to learn just how quickly news outlets, particularly local ones, are vanishing. The Medill School of Journalism at Northwestern University reports that US newspapers are closing at an alarming rate of 2.5 per week as of 2023. This trend is mirrored in Europe, largely due to declining advertising revenues. In the UK, for instance, the newspaper advertising market fell to just £241m (€284.7m) last year, down from £2.5 billion (€2.95bn) in the early 2000s when Google and Facebook were still emerging forces.

The Future of Journalism: AI’s Impact

This begs the question: will AI replicate the disruptive effects of Google on the press? The answer might not be straightforward. With Google and Facebook siphoning off substantial ad revenues, many publications have had to pivot their business models towards alternative revenue streams, such as subscriptions and donations. The Guardian, for example, now derives a significant portion of its US revenue from reader contributions, which may be more resistant to AI encroachment compared to advertising revenues.

However, the implications of AI on journalism remain largely uncertain. Could we find ourselves in a scenario where people receive their news directly from ChatGPT, which curates information and generates insightful commentary on current events? If that were to become a reality, would digital newspaper subscriptions decline? And will the financial influx from OpenAI’s partnerships be sufficient to sustain these publications?

Furthermore, what will happen to those news organizations that have not negotiated licensing agreements with OpenAI? As these questions loom, it may be prudent for the media sector to reconsider its approach. Some industry leaders suggest following the New York Times’ example and pursuing legal action against OpenAI for utilizing their content without adequate compensation. Alternatively, they might wait for governmental interventions like Canada’s Bill C-18 or Australia’s News Media Bargaining Code, both of which successfully pressured Big Tech to compensate journalists for their work.

Nevertheless, sitting idly while competitors engage in lucrative partnerships with OpenAI is hardly a wise business strategy. Thus, one cannot entirely blame media companies for accepting these financial arrangements.

As Nicholas Thompson, CEO of the Atlantic, articulated in a LinkedIn post, “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.” Yet, with the boundless uncertainties surrounding AI, it remains to be seen whether these partnerships will indeed yield the desired outcomes for the media landscape.

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.

At Euronews, we believe all views matter. Contact us at view@euronews.com to send pitches or submissions and be part of the conversation.