The owner of the Daily Mail has acquired a major stake in an artificial intelligence start-up as publishers look to generative AI in search of new streams of revenue.
DMG Media, which also owns the Metro, the I newspaper and the New Scientist magazine, has invested in ProRata.ai, a company that aims to pay publishers each time their content is used to generate AI answers, in a deal which is thought to value the business at around $130m with Sky News also considering making an investment.
The Guardian and Sky News have also agreed licensing deals with the firm which was founded in January and is launching its AI-powered search engine next month.
DMG Media vice chairman Rich Caccappolo said: “ProRata’s platform could be the cornerstone of a sustainable economic model for news publishers, giving them the incentive to continue investing in high-quality, informative journalism.
“The rise of language models and real-time content scraping represents a material threat to the news industry.”
ProRata offers a model that provides proportional compensation for publishers for the usage of their content, using an analysis of AI output to measure the value of each piece of contributing content.
This comes amid growing concerns in the media industry that start-ups are using copyrighted content as part of the vast datasets on which generative AI models are trained, something ProRata aims to combat.
Various lawsuits have been filed with regards to this, including the New York Post and Dow Jones suing Perplexity AI for using their content without permission or compensation.
The New York Times has also filed a similar lawsuit against OpenAI.
But other media outlets have struck deals with major AI companies, including the Financial Times’ recent agreement with OpenAI. The terms of the deals have not been disclosed.
ProRata’s CEO Bill Gross has previously said: “Current AI answer engines rely on shoplifted, plagiarised content.
“Our solution will lead to a broader movement across the entire AI industry.”
The firm has already agreed similar deals with Time, Fortune, The Atlantic, Universal Music Group and Axel Springer, and will make its technology available to license for other AI companies like OpenAI and Anthropic.
The LA-based firm have also said that it will share half the revenue from subscriptions to its platform with its licensing partners.
Nicholas Thompson, CEO of The Atlantic will also join the ProRata board of directors.
The move marks the latest in a string of tech companies funded by DMG Media in recent years, including financial management app Plum and legal tech will-writing firm Farewill.
But several have seen a downturn in their valuation since the investment with Farewill’s valuation by DMG slashed by over £50m in February and Plum’s by over £30m.