{"id":2319,"date":"2025-09-18T21:27:08","date_gmt":"2025-09-18T21:27:08","guid":{"rendered":"https:\/\/handaldunaway.com\/?p=2319"},"modified":"2025-09-18T21:27:12","modified_gmt":"2025-09-18T21:27:12","slug":"ai-pirate-now-pay-later-strategy","status":"publish","type":"post","link":"https:\/\/handaldunaway.com\/pt\/ai-pirate-now-pay-later-strategy\/","title":{"rendered":"AI\u2019s Pirate-Now, Pay Later Strategy"},"content":{"rendered":"<p class=\"has-medium-font-size\">The AI boom is creating fortunes at lightspeed. OpenAI, Anthropic, and their peers are building powerful models trained largely on creative work they didn\u2019t directly pay for. Anthropic\u2019s proposed <strong>$1.5 billion settlement<\/strong> with authors is an attempt to compensate to begin to compensate those creators \u2014 but it&#8217;s far from enough.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-vivid-red-color has-text-color has-link-color wp-elements-f996f32854d81313f55a0349cd2fd50a\"><strong>The Case for Differentiated Pricing<\/strong>&nbsp;<\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Creators already price differently depending on who\u2019s buying. A student pays $20 for a textbook; a university library pays thousands. Businesses pay more for commercial software than consumers. AI training data should be no different.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">Imagine books priced at $10 for a human reader but $10,000 for an LLM developer such as OpenAI and Anthropic. That might sound extreme \u2014 but consumer vs. commercial pricing exists everywhere. If you\u2019re using someone else\u2019s intellectual property to create exceptional value, like many AI firms are doing, you should pay a premium. Creators should be fairly compensated for their indispensable contribution to the creation and training of artificial intelligence.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-vivid-red-color has-text-color has-link-color wp-elements-5f083a16271a8aa5b8f9dd39b9d8c8d2\"><strong>Big Numbers, Relatively Small Settlements<\/strong>&nbsp;&nbsp;<\/h4>\n\n\n\n<p class=\"has-medium-font-size\">These AI firms are not small. Here are just a couple of recent valuations:<\/p>\n\n\n\n<h5 class=\"wp-block-heading\">Valuations of Leading AI Firms<\/h5>\n\n\n\n<p class=\"has-primary-color has-text-color has-link-color has-small-font-size wp-elements-a6bff7557dd74a841eedc059959ce0c1\" style=\"margin-top:0\">(Reported Estimated Valuations)<\/p>\n\n\n\n<div class=\"wp-block-columns has-medium-font-size is-layout-flex wp-container-core-columns-is-layout-9079f048 wp-block-columns-is-layout-flex\" style=\"margin-top:0;padding-top:0;padding-bottom:0\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:50%\">\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"925\" height=\"1023\" src=\"https:\/\/handaldunaway.com\/wp-content\/uploads\/2025\/09\/Why-Open-AI-Should-Pay-for-Artists-Datafjasfjiasdfsd-1.png\" alt=\"Vertical bar chart comparing estimated valuations of AI companies, OpenAI (~$500B), xAI (~$200B), and Anthropic (~$183B), highlighting OpenAI\u2019s dominant market position.\" class=\"wp-image-2351\" title=\"\" srcset=\"https:\/\/handaldunaway.com\/wp-content\/uploads\/2025\/09\/Why-Open-AI-Should-Pay-for-Artists-Datafjasfjiasdfsd-1.png 925w, https:\/\/handaldunaway.com\/wp-content\/uploads\/2025\/09\/Why-Open-AI-Should-Pay-for-Artists-Datafjasfjiasdfsd-1-271x300.png 271w, https:\/\/handaldunaway.com\/wp-content\/uploads\/2025\/09\/Why-Open-AI-Should-Pay-for-Artists-Datafjasfjiasdfsd-1-768x849.png 768w, https:\/\/handaldunaway.com\/wp-content\/uploads\/2025\/09\/Why-Open-AI-Should-Pay-for-Artists-Datafjasfjiasdfsd-1-11x12.png 11w\" sizes=\"auto, (max-width: 925px) 100vw, 925px\" \/><figcaption class=\"wp-element-caption\">Sources: Anthropic: via Anthropic, Sep 2, 2025 | xAI: via Reuters, July 11, 2025 | Open AI: via Krystal Hu&nbsp;and&nbsp;Shivani Tanna, Reuters, August 6, 2025<\/figcaption><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-vertically-aligned-center has-medium-font-size is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:50%\">\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.anthropic.com\/news\/anthropic-raises-series-f-at-usd183b-post-money-valuation\" target=\"_blank\" rel=\"noreferrer noopener\">Anthropic raised <strong>$13 billion<\/strong> in a Series F funding round in September 2025, valued <strong>post-money at $183 billion<\/strong>. <\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.reuters.com\/business\/openai-eyes-500-billion-valuation-potential-employee-share-sale-source-says-2025-08-06\" target=\"_blank\" rel=\"noreferrer noopener\">OpenAI is reportedly <strong>valued at about $500 billion<\/strong>, per recent news of a share\u2010sale that would allow current and former employees to cash out. <\/a><\/li>\n<\/ul>\n<\/div>\n<\/div>\n\n\n\n<p class=\"has-medium-font-size\">By comparison, Anthropic\u2019s proposed <strong>$1.5B<\/strong> settlement is less than 1% of these numbers. For a company like OpenAI, it&#8217;s a small part of their current annual revenue, and a minuscule fraction of their projected future annual revenue. That mismatch underlines how small these payouts are relative to the value extracted from creators\u2019 works.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-vivid-red-color has-text-color has-link-color wp-elements-98c16b50c567ae26e027b26a00669def\"><strong>The \u201cPirate-Now, Pay-Later\u201d Strategy<\/strong>&nbsp;&nbsp;<\/h4>\n\n\n\n<p class=\"has-medium-font-size\">History shows a pattern: Technology companies like Spotify or YouTube have, in the past, scaled rapidly by using content or IP for free or underpaid to quickly dominate a market, and then try settle lawsuits after they\u2019ve locked in distortionary advantages. AI could now be following the same path.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">If training sets are built on freely scraped content without any consequences, creators will be left with few rights and even less leverage. Within a short time, AI firms and their shareholders and investors will have captured trillions of dollars in value built on creators&#8217; work. The earlier deals start to be discussed, and pressure builds up on them to pay their share, the easier it will be to avoid getting trampled on by the move-fast-and-break-things mantra of Silicon Valley.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-vivid-red-color has-text-color has-link-color wp-elements-9aeb67a438ab9ec20e9ca0a8f231f699\"><strong>Giving Creators a Choice<\/strong>&nbsp;&nbsp;<\/h4>\n\n\n\n<p class=\"has-medium-font-size\">It comes down to consent and control. Creators should decide if their work is included in AI training, and at what price. Maybe some want exposure, others want premium fees. That decision belongs to them.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">And this isn\u2019t only about big names. Journalists, academics, coders, even everyday writers \u2014 all contribute data. If AI is going to power the next economy, its foundation must respect those contributions.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-vivid-red-color has-text-color has-link-color wp-elements-f78eec1c9f96a9b4d5f6af2434f53133\">The Publishers Pushing Back <\/h4>\n\n\n\n<p class=\"has-medium-font-size\">OpenAI has already struck several major content\u2010licensing deals with news publishers to access high-quality journalism. The key strategy these publishers have used to receive compensation is suing the AI firms for copyright infringement. The creators of AI LLMs have consistently settled these lawsuits to continue to have access to their content and, perhaps, also to avoid further scrutiny into what data was used to train their models.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">One of the largest deals was made with News Corp (owner of The Wall Street Journal) valued at <strong><a href=\"https:\/\/www.wsj.com\/business\/media\/openai-news-corp-strike-deal-23f186ba?utm_source=chatgpt.com\" target=\"_blank\" rel=\"noreferrer noopener\">over $250 million over five years<\/a><\/strong>, which grants OpenAI access to both current and archived content from News Corp publications. Dotdash Meredith, owner of People magazine and Better Homes &amp; Gardens, reportedly settled for ~$16 million with OpenAI. <\/p>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-28f84493 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"763\" height=\"433\" src=\"https:\/\/handaldunaway.com\/wp-content\/uploads\/2025\/09\/Untitled-Presentation-12-e1758230659270.png\" alt=\"Graphic showing logos of major media publishers that have signed licensing agreements with OpenAI and Microsoft. OpenAI\u2019s partners include Financial Times, Axios, Cond\u00e9 Nast, Vox Media, Hearst, TIME, The Atlantic, and Dotdash Meredith. Microsoft\u2019s partners include Axel Springer, Hearst, Financial Times, USA Today, and Reuters.\" class=\"wp-image-2363\" title=\"\" srcset=\"https:\/\/handaldunaway.com\/wp-content\/uploads\/2025\/09\/Untitled-Presentation-12-e1758230659270.png 763w, https:\/\/handaldunaway.com\/wp-content\/uploads\/2025\/09\/Untitled-Presentation-12-e1758230659270-300x170.png 300w, https:\/\/handaldunaway.com\/wp-content\/uploads\/2025\/09\/Untitled-Presentation-12-e1758230659270-18x10.png 18w\" sizes=\"auto, (max-width: 763px) 100vw, 763px\" \/><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\">\n<p class=\"has-medium-font-size\">While many contractual terms remain undisclosed \u2014 especially in agreements with the New York Times and others \u2014 reports suggest OpenAI has offered publishers somewhere between <strong><a href=\"https:\/\/www.theinformation.com\/articles\/openai-offers-publishers-as-little-as-1-million-a-year\" target=\"_blank\" rel=\"noreferrer noopener\">$1 million and $5 million annually<\/a><\/strong> for training rights. Such deals show publishers can push back to negotiate compensation rather than accept uncompensated use of their work\u2014and creators should partner with their publishers to demand similar licensing terms and transparency.<\/p>\n<\/div>\n<\/div>\n\n\n\n<p class=\"has-medium-font-size\">While many contractual terms remain undisclosed \u2014 especially in agreements with the New York Times and others \u2014 reports suggest OpenAI has offered publishers somewhere between <strong><a href=\"https:\/\/www.theinformation.com\/articles\/openai-offers-publishers-as-little-as-1-million-a-year\" target=\"_blank\" rel=\"noreferrer noopener\">$1 million and $5 million annually<\/a><\/strong> for training rights. Such deals show publishers can push back to negotiate compensation rather than accept uncompensated use of their work\u2014and creators should partner with their publishers to demand similar licensing terms and transparency.<\/p>\n\n\n\n<h4 class=\"wp-block-heading has-vivid-red-color has-text-color has-link-color wp-elements-eff11575459e887406fb3f355be7c4a9\"><strong>A Way Forward<\/strong>&nbsp;&nbsp;<\/h4>\n\n\n\n<ul class=\"wp-block-list has-medium-font-size\">\n<li><strong>Licensing marketplaces<\/strong>: Publishers, record labels, studios should build systems like ASCAP\/BMI but for AI training data \u2014 where creators can set differentiated prices for different kinds of users (humans vs. LLMs).<\/li>\n\n\n\n<li><strong>Transparency<\/strong>: Companies like OpenAI should publish what data they train on and negotiate directly with rights holders. Governments should, at a minimum, require this transparency from developers to help publishers self-enforce their copyrights.<\/li>\n\n\n\n<li><strong>Precedent matters<\/strong>: Courts approving inadequate settlements risk institutionalizing low pay. Copyright reform at the federal level may be necessary to set a framework that balances respect for creators&#8217; works and encourages technological development.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading has-vivid-red-color has-text-color has-link-color wp-elements-94b6f0f4273f5cfe2cfa5bc5424fa49b\"><strong>The Bottom Line<\/strong>&nbsp;&nbsp;<\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Generative AI has created trillions in value for tech firms and their shareholders. If that value is built on uncompensated labor, we risk repeating the same erasures that hollowed out creative industries in past tech waves. Differentiated pricing isn\u2019t just fair \u2014 it\u2019s unavoidable.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">Creators are owed more than exposure or legal disclaimers. It&#8217;s time for AI firms to pay for the data they depend on \u2014 not to hide behind the &#8220;publicly-available&#8221; argument that may be obscuring their copyright infringement.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">Na <strong>Handal Dunaway<\/strong>, we believe innovation should reward everyone who contributes to progress \u2014 not just those who commercialize it. Our research team closely follows the intersection of technology, intellectual property, and global capital markets to help investors anticipate risks and capture opportunities. In our related piece, <a href=\"https:\/\/handaldunaway.com\/pt\/artist-brand-alignment\/\" target=\"_blank\" rel=\"noreferrer noopener\">Artists and Brand Alignment: Turning Sponsorships into Strategy<\/a>, we explore how artists can turn partnerships into long-term brand equity \u2014 a concept that parallels the fight for fair compensation in the age of AI, where creators must think strategically about how their work is used and valued.<\/p>\n\n\n\n<details class=\"wp-block-details has-medium-font-size is-layout-flow wp-block-details-is-layout-flow\"><summary>Sources<\/summary>\n<ul class=\"wp-block-list\">\n<li>https:\/\/www.adweek.com\/media\/openai-dotdash-meredith-licensing-payment\/<\/li>\n\n\n\n<li>https:\/\/www.anthropic.com\/news\/anthropic-raises-series-f-at-usd183b-post-money-valuation<\/li>\n\n\n\n<li>https:\/\/www.reuters.com\/business\/openai-eyes-500-billion-valuation-potential-employee-share-sale-source-says-2025-08-06<\/li>\n\n\n\n<li>https:\/\/www.forbes.com\/sites\/danielnewman\/2025\/08\/21\/the-ai-bubble-paradox-why-openais-500-billion-valuation-proves-the-opposite\/<\/li>\n\n\n\n<li>https:\/\/www.anthropic.com\/news\/anthropic-raises-series-f-at-usd183b-post-money-valuation<\/li>\n\n\n\n<li>https:\/\/www.reuters.com\/business\/media-telecom\/global-news-publisher-axel-springer-partners-with-openai-landmark-deal-2023-12-13\/<\/li>\n\n\n\n<li>https:\/\/www.reuters.com\/business\/musks-xai-seeks-up-200-billion-valuation-next-fundraising-ft-reports-2025-07-11\/<\/li>\n\n\n\n<li>https:\/\/www.reuters.com\/business\/openai-eyes-500-billion-valuation-potential-employee-share-sale-source-says-2025-08-06<\/li>\n\n\n\n<li>https:\/\/www.wsj.com\/business\/media\/openai-news-corp-strike-deal-23f186ba<\/li>\n\n\n\n<li>https:\/\/www.theinformation.com\/articles\/openai-offers-publishers-as-little-as-1-million-a-year<\/li>\n\n\n\n<li>https:\/\/www.wsj.com\/business\/media\/amazon-to-pay-new-york-times-at-least-20-million-a-year-in-ai-deal <\/li>\n<\/ul>\n<\/details>","protected":false},"excerpt":{"rendered":"<p>The AI boom is creating fortunes at lightspeed. OpenAI, Anthropic, and their peers are building powerful models trained largely on creative work they didn\u2019t directly pay for. Anthropic\u2019s proposed $1.5 billion settlement with authors is an attempt to compensate to begin to compensate those creators \u2014 but it&#8217;s far from enough. The Case for Differentiated [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":2361,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","footnotes":""},"categories":[8],"tags":[408,381,400,382,396,399,401,403,409,402,397,380,410,406,387,412,393,398,385,379,52,392,384,404,293,391,395,51,407,383,390,389,394,411,23,53,386,333,92,388,405],"class_list":["post-2319","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-research-reports","tag-ai","tag-ai-business-models","tag-ai-copyright","tag-ai-ethics","tag-ai-lawsuits","tag-ai-licensing","tag-ai-monetization","tag-ai-regulation","tag-anthropic","tag-artificial-intelligence","tag-artists-rights","tag-capital-markets","tag-chatgpt","tag-claude","tag-content-licensing","tag-creator-economy","tag-data-compensation","tag-differentiated-pricing","tag-digital-rights","tag-disruption","tag-finance","tag-financial-times","tag-future-of-ai","tag-generative-ai","tag-handaldunaway","tag-innovation","tag-intellectual-property","tag-investing","tag-llms","tag-market-trends","tag-media-partnerships","tag-news-corp-deal","tag-nyt","tag-openai","tag-private-equity","tag-strategy","tag-technology-markets","tag-wallstreet","tag-wealth-management","tag-wsj","tag-xai"],"_links":{"self":[{"href":"https:\/\/handaldunaway.com\/pt\/wp-json\/wp\/v2\/posts\/2319","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/handaldunaway.com\/pt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/handaldunaway.com\/pt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/handaldunaway.com\/pt\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/handaldunaway.com\/pt\/wp-json\/wp\/v2\/comments?post=2319"}],"version-history":[{"count":30,"href":"https:\/\/handaldunaway.com\/pt\/wp-json\/wp\/v2\/posts\/2319\/revisions"}],"predecessor-version":[{"id":2370,"href":"https:\/\/handaldunaway.com\/pt\/wp-json\/wp\/v2\/posts\/2319\/revisions\/2370"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/handaldunaway.com\/pt\/wp-json\/wp\/v2\/media\/2361"}],"wp:attachment":[{"href":"https:\/\/handaldunaway.com\/pt\/wp-json\/wp\/v2\/media?parent=2319"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/handaldunaway.com\/pt\/wp-json\/wp\/v2\/categories?post=2319"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/handaldunaway.com\/pt\/wp-json\/wp\/v2\/tags?post=2319"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}