High-Stakes Showdown: Publishers Insist on Billions in Payments as AI Platforms Grapple with Business Model

Barry Diller's IAC Inc IAC and significant publishers, including industry giants like New York Times Co NYT, News Corp NWSA, and Axel Springer, are forming a coalition to address AI platform concerns, considering a possible lawsuit and legislative action.

IAC CEO Joey Levin is playing a prominent role in the coalition, emphasizing that the implications of AI taking over media content could be more significant than just sci-fi fears of AI taking over the world, Semafor reports.

Publishers worry about AI threatening their revenue and online authority, notably Alphabet Inc GOOG GOOGL Google's potential shift to chatbot-based answers instead of web pages.

Publishers aim to avoid repeating the mistakes of the social media era when they gave away content for free. They sought adequate compensation for tech companies leveraging their data to train AI models.

The coalition and AI companies are discussing a possible settlement where AI companies would pay for publishers' training data access. However, there is a significant disagreement on the expected payout amount, with publishers believing it should be in the billions of dollars across the industry.

Google and other tech companies claim that they are yet to figure out a viable business model for AI with no profits to share due to the high costs associated with maintaining language models.

The legal landscape surrounding AI and copyright issues remain largely untested, and publishers are closely monitoring a Delaware lawsuit related to AI's use of legal texts from Westlaw.

The potential payments that publishers expect from AI companies could mark a significant change, as tech companies, including Google, have operated high-margin businesses without paying for content.

Price Action: NWSA shares traded higher by 1.22% at $19.88 premarket on the last check Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.