The New York Times accuses OpenAI and Microsoft of violating copyright law | Equity Podcast

This episode is sponsored by Morgan Stanley atw work visit morganstanley.com Assessment to get your free transaction Readiness assessment [Music] Today hello and welcome back to equity The Tech runch podcast where we unpack The numbers and the Nuance behind the Headlines this is Alex good morning and Welcome to 2024 we have slammed the door on 2023 And kicked open the door to an entire Fresh new year so welcome before we Start I do have a couple of very Interesting and fun housekeeping notes So please stick with me for 30 seconds First up we did have three really fun Episodes come out between Christmas and The new year so if this little dose of Startup and Tech news is not enough to Fully say to you we do have lots of Great stuff out to keep you company as You get back to work as you commun mute As you avoid the last drags of your Family and also Equity is going to shake Up its schedule this year nearly every Year of the show we have made at least Slight tweaks to its format based on What we think best meets the moment and What you have asked for so this year Equity Monday and Equity Friday are Going to stay much as they are every Monday or Tuesday on weeks that start a Day late we will recap the weekend's

Critical Tech events and then take a Look at the week ahead and Equity Friday Is going to remain our Roundtable news Roundup it's the original Equity we're Not going to touch it however Equity Wednesday our weekly interview show for The last few years is going to change What are we doing we are going to Shorten and tighten it and make it all About really cool startup stuff Equity Monday always covers a bit of Economic And financial news which is good and Useful but we've heard from folks that They want even more startup stuff so who Are we to not give you exactly what you Want so expect Equity Wednesday to be a More condensed more focused show from Here on out but interviews are not going Away we're still going to do them as we Think they are important to keep you up To date with the latest trends in Startups so expect those to come out Here and there as bonus episodes as we Go all right sound good let's get into That new year and on the show today we Have how the world's financial markets Are starting 2024 crypto's re re re Rebirth copyright and AI starting off The year at each other's throats X's Latest valuation and then a little bit Of climate Tech hype let's Go let's start as we always do with a Quick overview of the world of money and That means stocks Shares are mixed today

In Asia they are mostly lower in Europe But are coming off of nearly 2year highs So I'm not that concerned and they're Down in premarket trading here in the US And the leading story is a negative Analyst called dinging the value of Apple on the earnings front nothing how About that what a great way to start the Year but if the earnings calendar is Bereft of any useful information well Crypto is going to be filling up that Headline space for us because well Bitcoin is up 6 and a half% in the last Week to 455,000 USD ethereum's token is Up 6.9% in the last 7 days to $2.4 th000 And everywhere you look there is more Black ink salana up 8.6 6% in the last 24 hours binance's token is up 10% in The last week it's quite a lot of good News and crypto trading volume was far Better in the final quarter of 2023 than In the second and third quarters of the Year so crypto was starting off on a Better footing than I actually expected It to however do recall that in 2023 we Also saw strong trading volumes at the Start of the year compared to the middle So we should not count our nft chickens Before they hatch elsewhere in crypto Land all eyes are on the potential Approval of Bitcoin spot ETFs which some Crypto folks think could unlock new Demand for digital tokens while other Folks argue that any gains coming from

That are already priced In next up it's my favorite part of the Show what I call big news that matters And there was no news that was bigger or Mattered more than the recent New York Times versus open AI lawsuit that Dropped a couple of days ago so let me Catch you up and then tell you what's Going on in late December the New York Times sued open Ai and Microsoft Alleging copyright infringements Including quote widescale copying now This is not the first lawsuit we have Seen of this type but others have come From creators and not a group with the Times large resource base how big is That resource base well the New York Times company is worth about $8 billion Today and is up about 1% in pre-market Trading in case you were curious now This is not just a case of of copyright Infringement the times has a larger Claim than that and I quote defendants Unlawful use of the times work to create Artificial intelligence products that Compete with it threatens the times's Ability to provide that service Essentially you stole our stuff and you Are now using it to undercut us it's a Big claim New York Times also says that Open aai took millions of its articles So this is not a small bit of hey give That back a lot of claims so what is the Evidence well New York Times writes in

It suit that quote powered by llms Containing copies of times content Defendants gen AI tools can generate the Output that recites times content Verbatim closely summarizes it and Mimics its expressive style as Demonstrated by scores of examples I Believe in legal speak that's I got the Receipts a couple of things to consider First open AI is worth a bajillion Dollars and is backed by a company whose Value is measured in the trillions not Even the the billions number two Microsoft will want to protect its Massive investment in open Ai and three It is using open AI products in large Enterprise software deals so there is a Lot of money on the line here and I Guess the question is what portion of That money is owed to others if the New York Times wins or even just gets a fat Check everyone who got yanked into the Open AI data sets is also going to want One this has big implications Potentially for other llms that were Trained on non-licensed data now Tech Folks are often annoyed here why can't We just use that stuff how is this Different than search well the answer to The first question is copyright law Something that tech companies use to Their own Advantage all the time and Then the answer to the second is that This is not indexing in which a company

Goes out there scans the whole web takes It in and then exchanges a snippet for Search traffic no no this is collection Consumption and then later regurgitation Without credit credit or compensation in Short the search agreement was value Going to both parties can you really Argue that that is the case here other Questions that are stuck in my head Include what impact will this time suit Have on open- Source AI models that Might not have a generous and Wealthy Financial backer what other tech Companies could get hit with similar Suits next I have a couple ideas I'm Sure you do too and then amazingly Enough is it the case that the written Word has never been worth more than it Is right now that's [Music] Ironic next up news about my favorite Private company akx FKA Twitter also Known as the place where Elon Musk can Ship post and call it work well Tech Reports that mutual fund company Fidelity has marked down its investment In X Holdings the parent company of X Owned by musk by 71.5% from its original valuation now For historical context Fidelity spent Just over $19 million to acquire a stake INX back in October of 2022 by October Of 2023 it had marked that down by 65% And now with its November disclosure

Which was made public in December that Has been increased to a 71.5% production so if you curious that Percentage decline from the original $44 Billion price tag works out to about 122.5 billion in value which I do Believe is less than the total debt that Musk took out to buy the company Originally it's apparently very hard to Make money in social media if your name Is not Meta looking for a bright spot to Contrast the layoff coverage that we saw And endured so much of back in 2023 well Tech runes Tim desant has an idea of Where we should look for better Tidings He writes climate Tech is one sector That has been hiring in 2024 looks like It will be continuing the trend clean Energy jobs have grown 10% in the last Two years outpacing the economy as a Whole and he thinks we're going to see More of that this year and maybe also Next year now I think this means one of Two things first of all one VCS are Showering climate Tech startups with new Cash or potentially Revenue growth at Those startups is looking tidy or Both and to close out the times has an Interesting look at how growth in Defense Tech investment is driving more Former American military officials into The ranks of venture capital firms that Means my friends we have a new revolving

Door to track it all feels very signed At the times but I can't help but Imagine how funny it must be to be a Former American Military General on your First date of inter Capital firm you Open the door and there's a bunch of People wearing athleisure and pajamas Who's in charge how do you find out There's no ranks oh my gosh that must be Amazing culture Shock and that is our show for this fine Tuesday Morning of course Equity will be Back on Wednesday and back on Friday if You want even more from the show we are Equity pod over on xn threads and if you Want more from me I am Alex over on X as Well we have two sister shows Chain Reaction all about the world of crypto And found digging deep into Founders Stories we'll talk to you soon hugs Welcome to the New Year Equity is hosted by myself editor And chief of Tech runch Plus Alex Wilhelm and Tech runch senior reporter Mary and aeto we are produced by Teresa Loans solo with editing by Kell Bryce Durban is our illustrator and a big Thank you to the audience development Team and Henry pette who manages Tech Rench audio products thank you so much For listening and we'll talk to you next Time