A new startup industry says it can feed generative AI’s insatiable need for training data while still offering artists and creators control and compensation for the use of their works.
The startup rights collectives are emerging as lawsuits from writers, artists, and news outlets accuse Big Tech players such as
The dispute seems destined for the Supreme Court, and final decisions aren’t likely to arrive anytime soon.
“That creates the space we’re in right now, where there is a lot of interest in licensing and not waiting for the courts,” said Rachel Fertig, IP attorney with DLA Piper.
Created by Humans recently launched a platform that lets tech firms shop for author-sanctioned catalogs of books. Narrativ has built a marketplace for voice actors to license their likenesses and entered into an agreement with labor union SAG-AFTRA. And Prorata, whose tools can help break down AI outputs to compensate each contributor, has partnered with over 400 publications since August, including Fortune, The Atlantic and Axel Springer, as well as Universal Music Group.
So far, most public deals AI companies have inked are with large media custodians including News Corp. and Shutterstock, leaving individual creators behind.
“If these middlemen startups are able to aggregate a lot of individuals into a single package,” said Ed Klaris, managing partner at Klaris Law, “they can get the attention of the licensees.”
Collective Licensing
Since the public launch of ChatGPT in 2022, the Authors Guild, one of the largest professional organizations for writers, has lobbied for legislation that would facilitate collective licensing, president Mary Rasenberger said in an interview.
“You need the ability to collectively license when the individual owns the works and not big companies,” Rasenberger said. “You know AI companies aren’t going to go to 200,000 different authors to get permission.”
A former president of the Authors Guild and co-plaintiff in its suit against OpenAI, best-selling author Doug Preston said he was intrigued when he heard the organization wanted to partner with Created by Humans. After a deal was inked in October, he became convinced the company understood writers’ concerns about controlling their work, and decided to sign himself up and invest.
“I want to control my work,” he said. “Every author wants to control their work. I mean, that’s a fundamental right of a creative person, is to control their creative output.”
Trip Adler, co-founder and CEO of Created by Humans, said it allows authors to register their novels and select the AI rights they’re comfortable licensing. AI companies can browse through libraries of books legally permitted for training models or other uses.
Narrativ built a similar marketplace for voice actors. An ad company can shop for a voice on the platform and feed Narrativ’s AI software a script to generate a voiceover. The script is then sent to the actor, who can approve the language narrated by their voice and get paid for it.
Phil Sutfin, a co-founder of ACM Talent, a voiceover management company, said 80% of his roughly 200 clients are on board with Narrativ, and around 40 actors have signed up to use the platform.
Jeffrey Bennett, SAG-AFTRA’s general counsel, said the union has been contacted by “lots and lots” of startups interested in licensing actors’ likenesses, and he called the rush of interest a “Wild West sort of environment.”
The union has signed collective bargaining agreements with Narrativ and several other startups, including video-game company Replica Studios. Bennett said the organization isn’t interested in partnering with anyone who can’t enter one. Narrativ’s willingness showed it would “put its money where its mouth is,” he said.
“If we can sign these people to contracts, you have the bargaining power, the bargaining leverage of the entire union behind you,” Bennett said.
Suchir Batra, a talent manager with SB Initiative for actors in India who has collaborated with Narrativ, said the backing of organizations like SAG-AFTRA is “massive.”
“Artists also don’t want to do anything—particularly those who are members of the union—that run afoul of the union,” he said. “They don’t want to jeopardize their membership for something that is still so nascent.”
The collectives, though, face a steep learning curve.
“There’s IP rights, there’s labor law, there’s things that they probably aren’t as focused on that they’re now very quickly learning,” Bennett said.
Even if they can clear those hurdles, the collectives will have to prove their value not just to the creatives whose rights they’re bundling, but to the AI developers they hope to sell to, especially as they compete with large publishers and studios that can provide massive troves of training data.
“The value of licensing these smaller, more artisanal corpuses to the AI companies is just not going to be that great unless we’re talking about a particular artist where we want to train an AI to be able to work in their style,” Washington College of Law professor Michael Carroll said. “For the AI company, it’s about scale.”
Litigation Buffer
Licensing gives tech companies a way to train on data with permission and insulate themselves from copyright liability—especially smaller companies that can’t afford expensive lawsuits, or ones dipping their toes in untested areas of AI copyright law.
“Everyone is really nervous about copyrights because copyright and AI is such a mess,” Adler said.
Models trained on only publicly available content run out of room for improving the AI’s performance, said UK-based lawyer Matt Hervey, head of legal policy at Human Native, a rights marketplace startup.
“AI developers want huge amounts of training data, especially content that can’t be scraped—the archives of scientific publishers, music and video in specialist formats, or just weird content they haven’t trained on before,” he said.
Without feeding AI models human-generated content, Hervey said, they could stop functioning properly. That’s why AI developers will continue to need creators.
“It’s in everyone’s interest to make this work, both ethically and commercially,” Hervey said.