The Generative AI power list!
Microsoft, Amazon & Google accounted for 2/3 of the $27+ billion invested into generative AI startups in 2023 ... and Microsoft just invested 3.2 billion euros more.
Welcome to your post-holiday Tuesday morning “brAIn” dump - my weekly newsletter that lays out the transformational power, promise and perils of generative AI, and gives you concrete tools and exclusive insider “news you can use” to take action and turn perils into exciting new possibilities. Let’s get right into it!
I. the “mAIn event” (this week’s feature story) - introducing the Generative AI investment scorecard
Microsoft led the way in generative AI startup investments in 2023 with $11.3 billion (virtually all of it in ChatGPT creator OpenAI), and isn’t done yet. Just this past Thursday, February 15th, Microsoft announced it will invest 3.2 Billion Euros in German AI and tech companies (I’m sure none of that is intended to sweet talk and assuage EU regulators so that they reduce their overall scrutiny on its activities). Amazon, Google, Nvidia and collective venture capital investors trailed far behind, while Meta and Apple were absent (choosing to do it virtually all themselves).
VC-backed Perplexity is particularly interesting. It just raised $74 million at a $520 million valuation to take on Google with its AI-powered search engine. Try it out for yourself here. I did - and its overall user experience towers over Google search in terms of simplicity. Should Google worry that generative AI search will ultimately eat its lunch? Here’s my best answer. I just sold some Google stock because I believe that its one-dimensional ad-supported business is vulnerable.
My firm, Creative Media, and I researched and created this infographic for you (special thanks to Natalie Kim!) to easily visualize and track the size and source of these generative AI investments. Send feedback about this or anything else to peter@creativemedia.biz.
II. the trAIler - 10 AI “quick hit” headlines and previews for the week (you know, like a movie trailer!)
(1) Hey AI, humans wanted! Just like the U.S. Copyright Office recently did with creative works, the US Patent and Trademark office just ruled again that AI-only generated inventions are not patentable. Humans must make a “significant contribution.”
(2) You know, because they really care. Just last Friday, 20 tech companies - including Microsoft, OpenAI, Amazon, Anthropic, Google, Meta, and X signed a pledge to prevent deceptive AI content and deepfakes from disrupting the 2024 elections. X’s Musk is likely particularly committed to the public good, right? Mental health champion Meta’s Zuckerberg too. Continuing his reputation rehabilitation tour, Zuck and Meta announced plans to beat back deepfakes by labeling AI-generated images on Facebook, Instagram and Threads.
(3) OpenAI just freaked out Hollywood (again). The relentless generative AI leader introduced its new “text to video” AI generator called “Sora” that creates photorealistic, and ultimately cinematic, quality videos. Potential Hollywood job displacement is daunting. Attention film students (including my son at NYU Tisch), make sure to take classes in prompt engineering. Yes, I’m completely serious.
(4) But OpenAI isn’t done just yet (although …). CEO Sam Altman’s “startup” just crossed the $2 billion revenue milestone. At the same time, ChatGPT’s growth is reportedly flatlining.
(5) Are we obsessed with Sam Altman? No, he’s just everywhere. He’s now seeking $5-$7 Trillion (yes, with a capital T!) to fund a new AI chip manufacturing company and steal some of Nvidia’s mojo.
(6) Nvidia says two can play that game. AI chip juggernaut Nvidia introduced its own new AI chatbot that runs locally on your PC, encroaching on OpenAI’s ChatGPT turf. Take that Sam!
(7) Do you need a Hug? Not to be outdone, open-source generative AI leader Hugging Face launched a new feature called “Hugging Chat Assistant” to rival OpenAI’s GPT store, which allows users to create personalized AI chat assistants. I’ll be launching one soon (it is in development now, and is kind of blowing my mind).
(8) Time to pick up a hobby or two. McKinsey reports that by 2030 generative AI could automate 30 percent of hours worked today. Just to remind us all, that’s less than 6 years from now!
(9) Microsoft actually became cool during the Super Bowl. Its ad’s message was the opposite - that its generative AI Copilot tool won’t steal your jobs, it will instead help you fulfill your dreams. So, is McKinsey or Microsoft right?
(10) But Gen Z “AI natives” aren’t fazed by any of it. And good for them! Don’t fear it, learn to use it. And that’s what’s happening, as college students reportedly are piling into generative AI courses. Great advice for all of our kids.
III. the litigAtIon tracker - key AI cases to follow (& updates)
(1) Sarah Silverman, et al. v. OpenAI - NEW MAJOR UPDATE!
Background: This is a separate class action filed by Sarah Silverman and others in the U.S. District Court for the Northern District of California that asserts similar infringement claims to the claims asserted in their case against Meta (below). Similar case, different defendants, but unfortunately for Silverman and the other plaintiffs, similar conclusions reached by the court so far. On February 12, 2024, the district court judge dismissed most of plaintiffs’ claims asserted against OpenAI, rejecting their argument that the content generated by ChatGPT (i.e., the “output”) infringes their copyrights or constitutes unjust enrichment. Essentially, the court found no “substantial similarity” of the output to the plaintiffs’ works and, therefore, no actionable harm.
Current Status: But the court gave Silverman until March 13th to amend the complaint and plead a more direct link between the AI’s “output” and harm to her and other plaintiffs. Further, and importantly, the court has not yet ruled on the “input” side of the equation - whether OpenAI’s mass “training” of copyrighted works amounts to infringement. Similar to my prediction in Silverman’s case against Meta, I expect that the court here won’t change its mind and the case will be largely dismissed pre-trial at least on the “output” side of the equation. I also suspect that this court will dismiss most, if not all, claims based on the AI’s training on the “input” side. My advice to Silverman’s attorneys is to analyze and emulate The New York Times complaint against Microsoft and OpenAI (which I discuss above). Read my deep dive analysis of the case, the court’s initial rulings, and what they portend here.
(2) Sarah Silverman, et al. v. Meta
Background: In this class action lawsuit filed in the U.S. District Court for the Northern District of California, comedian Sarah Silverman and several others sued Mark Zuckerberg’s Meta on July 7, 2023, for copyright infringement for essentially the same rationale used by UMG in its Anthropic case - i.e., mass unauthorized “training” by their AI’s LLM on millions of copyrighted written works, including their own. Meta’s fundamental defense is “fair use,” and this case is much further along than the others noted above. In November 2023, the court largely sided with Meta and dismissed the bulk of plaintiffs’ claims, essentially concluding that Meta’s AI’s “output” is not substantially similar (or even remotely similar) to the individual copyrighted works of the plaintiffs and thus could cause no meaningful harm.
Current Status: The court did, however, give Silverman a chance to amend the original complaint to add a more direct link to actual harm (it was filed in December), and that re-hearing is pending. But my prediction is that the court won’t change its mind and the case will be largely dismissed pre-trial. Read my deep dive analysis of the case, the court’s initial rulings, and what they portend here.
(3) The New York Times v. Microsoft & OpenAI
Background: The Times filed its complaint in the U.S. District Court for the Southern District of New York on December 27, 2023 for mass copyright infringement, together with other related claims, claiming that OpenAI scraped “millions” of its copyrighted articles to train its LLM without consent and payment of any kind (and Microsoft essentially enabled the infringement). In its pleading tour de force (one that serves as a master class for all future plaintiffs to follow in these types of AI infringement cases), The Times further contends that Microsoft and OpenAI are essentially trying to build a “market substitute” for its news and, notably, that defendants’ AI generates “hallucinations” based on The Times’ articles and, therefore, substantially damages its reputation and brand. The Times seeks “billions of dollars of statutory and actual damages.” Microsoft’s and OpenAI’s primary defense will undoubtedly be “fair use” - i.e., no license, payment or consent is needed.
Current Status: Nothing substantive yet; still in preliminary hearings about attorney appearances, etc. Read my deep dive analysis of - and prediction for - the case and its ultimate resolution here.
(4) Universal Music Group, et al. v. Anthropic
Background: UMG, Concord Music and several major music companies sued Amazon-backed OpenAI competitor Anthropic on October 18, 2023 in the U.S. District Court for the Middle District of Tennessee. Plaintiffs contend that Anthropic is infringing their collective music lyric copyrights on a massive scale by scraping the entire web to train its AI, essentially sucking up their copyrighted lyrics into its vortex – all without any kind of licensing, consent or payment.
Current Status: Plaintiff music companies have filed preliminary injunction motions, and Anthropic has filed motions to dismiss, but no hearings are set yet on those motions (although there was a flurry of procedural matters this past week). The court set the trial date for November 18, 2025 (no, that’s not a typo; 2025 it is). Read my deep dive analysis of - and prediction for - the case and its ultimate resolution here.
(5) Getty Images v. Stability AI and Midjourney
Background: Getty Images sued leading generative image AI companies Stability AI and Midjourney on February 3, 2023 in the U.S. District Court for the District of Delaware for mass infringement of its copyrighted photographic library. Getty’s claims are similar to those plead by The New York Times v. Microsoft & OpenAI, but in the context of visual images instead of written articles - i.e., unauthorized scraping by their AI with an intent to compete directly with Getty Images (i.e., market substitution).
Current Status: The case was transferred to a new judge on January 8, 2024, who denied the defendants’ motion to dismiss the case on January 26, 2024. But the judge gave defendants a chance to re-file those motions after jurisdictional discovery is completed. Read more about the case and its background and overall context here.
NOTE: You’ll see a new “LitigAtIon Tracker” tab at the top of the page at “the brAIn” website. That’s where you’ll always be able to easily find and track the cases that matter.
IV. the cocktAIl - your closing AI mix (cool “must attend” AI events, curated guest essays, additional resources)
After all, it’s always happy hour somewhere!
Today’s closing cocktAIl, ginned up by your favorite resident mixologAIst (yours truly), include new “must attend” events and the brAIn’s first guest essay, written by John Campion (bio here). It’s both thoughtfully written and thought-provoking. Consider his guest essay that closes this edition the “last refrAIn.”
(1) “MUST ATTEND” events - save the dates!
(i) BREAKING: MAJOR NEW AI EVENT! Digital Hollywood just announced its first exclusively generative AI-focused virtual summit, “The Digital Hollywood AI Summer Summit,” on four days in July (July 22nd - 25th). The depth and breadth of the sessions are outstanding, and they’re all virtual (so all of you can - and should - attend). Learn more here via this link.
Exciting related news. My firm Creative Media is joining forces with Digital Hollywood to host a series of free monthly generative AI-focused webinars leading up to the event, to both prep you for (and preview) the Summit. I’ll be interviewing leading artists and entrepreneurs about the state of generative AI. Look for more information about this new free webinar series in upcoming newsletters.
(ii) AI LA’s “A.I. on the Lot” May 16th, 2024 event. This is also a “must attend” event. Check it out and sign up here. I attended last year. It’s where all the LA-based media and generative AI “movers and shakers” meet, learn, and collaborate.
(2) the last refrAIn - “Data & Electricity” (guest essay by John Campion)
Advocates and freedom in an AI world: two essentials for AI - data and electricity. Who will ensure that personkind and each individual will be free from the unlimited power of control by data, computers, machine learning, large language models and their offspring Chatgbt and its rapidly expanding, out-of-control successors, being developed in the shadows of our collective comprehension? Can the system ‘hold the centre’ or is our humanity soon to be directed from some unseen and unknowable force for good and/or evil?
This is no scare tactic of an anxious age. The very creators of the large language model from Toronto (Hinton) and Stanford (Fei Fei Li) have warned us to pause and assess these new technologies that, by a lack of data privacy, will know more about every individual than we know about ourselves. The speed from machine learning to the large language model and the ChatGPT models is less than 14 years. Our legislators, regulators and other public systems that might protect the people from the worst of these new machines (soon to be acting on their own will) and subsequent loss of freedom and dignity have failed the people’s cause by lack of comprehension and muscular action to ensure privacy.
For the people with freedom and justice in their souls, move on with passion and commitment for limitations on individual data sharing and machine controls that are upon the world as sure as climate warming has shifted from a two decade problem ahead to a ‘wonder-destroying’ actuality today. As between the climate issues from increased carbon and the AI control from data, it is impossible to choose which is more dangerous. I predict it is the loss of freedom and individual dignity by individual data collection, storage, misuse beyond reasonable expectations and corporate custody in perpetuity and sharing in the forever world of AI.
Legislators, regulators, and courts have an obligation to fully understand the context of AI and dignity, freedom, look forward not backward to what was past and become vehicles of transformative thinking and judgment in the exercise of their mandates. There is no time to catch up, without radical thinking and immediate action, as change is so great now that today’s changes are beyond our predictive capacity. Control the data and the use of electricity and personkind may have a chance to save ourselves for an otherwise bleak unknowable future in bondage.
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