Deal Dive: Human Native AI is building the market for AI training licensing agreements

AI systems and large language models need to be trained on massive amounts of data to be accurate, but they shouldn't train on data they don't have the rights to use. OpenAIs licensing agreements with The Atlantic and Vox last week showing that both sides of the table are interested in securing these licensing deals for AI training content.

Human Native AI is a London-based startup building a marketplace to broker such deals between the many companies building LLM projects and those willing to license data to them.

The goal is to help AI companies find data on which to train their models, while ensuring rights holders sign up and get compensated. Rights holders upload their content for free and connect with AI companies to secure revenue shares or subscription deals. Human Native AI also helps rights holders prepare and price their content and checks for any copyright infringements. Human Native AI takes a cut of every deal and charges AI companies for their transaction and monitoring services.

James Smith, CEO and co-founder, told JS that he got the idea for Human Native AI from his previous experiences with Google's DeepMind project. DeepMind also ran into problems because it didn't have enough good data to properly train the system. Then he saw that other AI companies were running into the same problem.

“It feels like we're in the Napster era of generative AI,” says Smith. “Can we reach a better era? Can we make it easier to acquire content? Can we give creators some level of control and compensation? I kept thinking, why isn't there a marketplace?”

He pitched the idea to his friend Jack Galilee, an engineer at GRAIL, while walking through the park with their respective children, as Smith had done with many other potential startup ideas. But unlike before, Galilee told them to go for it.

The company launched in April and is currently in beta. Smith said demand from both sides has been very encouraging and they have already signed a handful of partnerships that will be announced in the near future. Human Native AI this week announced a £2.8 million seed round led by LocalGlobe and Mercuri, two UK micro VCs. Smith said the company plans to use the funding to expand its team.

“I'm the CEO of a two-month-old company and I've been able to get meetings with CEOs of 160-year-old publishing companies,” Smith said. “That suggests to me that there is a big demand on the publishing side. Likewise, every conversation with a large AI company is exactly the same.”

While it's still early days, what Human Native AI is building appears to be a missing piece of infrastructure in the growing AI industry. The big AI players need a lot of data to train on and giving rights holders an easier way to work with them while giving them full control over how their content is created seems like a good approach that could make both sides of the table happy. is used.

“Sony Music just sent letters to 700 AI companies asking them to stop,” Smith said. “That's the size of the market and potential customers that could acquire data. The number of publishers and rights holders could be thousands, if not tens of thousands. We think this is why we need infrastructure.”

I also think this could be even more beneficial for the smaller AI systems that don't necessarily have the resources to make a deal with Vox or The Atlantic to still have access to data to train on. Smith said that's what they're hoping for, too, and that all the notable licensing deals to date have involved the bigger AI players. He hopes that Human Native AI can contribute to a level playing field.

“One of the biggest challenges with licensing content is that you have large upfront costs and you severely limit who you can collaborate with,” said Smith. “How do we increase the number of buyers for your content and lower the barriers to entry? We find that very exciting.”

The other interesting piece here is the future potential of the data that Human Native AI collects. Smith said that in the future they will be able to provide rights holders with more clarity about the price of their content, based on a history of deal data on the platform.

It's also a smart time to launch Human Native AI. Smith said that with the European Union's AI Act in development and potential AI regulations in the US looming, AI companies that collect their data ethically – and have the receipts to prove it – will only will become more urgent.

“We are optimistic about the future of AI and what it will do, but we need to make sure we are responsible as an industry and don't decimate the industries that got us to this point,” Smith said. “That wouldn't be good for human society. We need to make sure we find the right ways to enable people to participate. We are AI optimists on the human side.”

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