Story Protocol Raises $80M to Revolutionize IP Ownership in the AI Era

Story raises $80M for blockchain-based IP network to address creative ownership in the AI era - SiliconANGLE

Programmable IP Labs, the core contributor to the intellectual property-tracking blockchain network Story Protocol, today said it raised $80 million in new funding led by a16z crypto. The Series B round brought the total raised by PIP to $140 million including $54 million from a previous round also led by a16z in September 2023. Other investors participating in the round included Polychain, Stability AI Ltd.'s board member and Vice President Scott Trowbridge, K11 Founder Adrian Cheng and digital art collector Cozomo de' Medici. Intellectual property represents anything made by people, not just big-billed creative projects such as Hollywood movies, music playing on the radio and AAA video games, PIP Labs argues. It includes the artwork, music, articles, writing and everyday memes generated by normal people. With the rise of artificial intelligence, IP has become ever more valuable, as it now serves as the foundational input for large language models and image generating AI models. "Big tech is stealing IP without consent and capturing all the profit," said SY Lee, co-founder and chief executive of PIP Labs. "First, they will gobble up your IP for their AI models without any compensation back. Then, they will hijack your future economics by sucking in all your potential traffic. At least, in the past, Google was kind enough to drive some traffic to your content, and that still killed many local newspapers." In its current state, AI has both positive and negative effects. In one way it gives the ability to quickly create vivid and beautiful images without much effort, mere words can summon forth the imaginative and the beautiful. However, on the other side, Lee notes that if model developers do not incentivize creators to share their works and pay them for their labor that pool of human creativity will dry up. "The current state of AI completely destroys the incentive to create original IP for all of us," said Lee. "This surely will be negative for AI if no one has incentive to create something original for AI to train upon. They are inadvertently taking a suicidal action in the long run." The Story Protocol uses blockchain to provide attribution for IP rights as well as creative rights licensing such as copyright for creators and IP owners. Blockchain technology has long been used to attribute intangibles with ownership including images and video game assets. One famous example is the digital artist Beeple's artwork "Everydays: The First 5000 Days," which was attributed as a blockchain nonfungible token and sold for $69 million in 2021. One of the benefits of blockchain technology is that it runs peer-to-peer and allows for the creation of programmable readable and writable metadata that can represent IP rights and agreements between parties. Developers can use the Story Protocol to take IP rights, assets and licenses and turn them into automated royalty payments, allowing them to be integrated into applications for easy sharing of IP rights. PIP says this will unlock new revenue streams for creators that didn't exist before and with blockchain technology tracking attribution for the creative works, AI model developers can compensate them fairly without the need for lawyers or middlemen. "Think of Story as an IP Legoland," said Jason Zhao, co-founder and chief product officer at PIP Labs. "On Story's blockchain, IP turns into IP Legos -- programmable, on-chain assets, ready for remixing and composing across thousands of applications. IP Legos and generative AI are yin and yang. Give fans exciting IP Legos to play around with and the magic wand of generative AI, they can create the next exciting spinoff space opera films, sequel hardcore games, remixed house music, and trendy fashion design." Since launch, more than 200 teams, totaling more than 20 million intellectual property assets, are already building on Story across various industries, including AI and consumer markets. Space Runners' Albo, an AI fashion design tool backed by Polychain and Pantera, is building on the platform to allow anyone in the world to customize the latest fashion with the power of generative AI in collaboration with major brands.

IP-Focused Blockchain Startup Story Protocol Raises $80M

With AI creating new issues regarding theft of intellectual property, San Francisco-based startup Story Protocol raised an $80 million Series B to try to solve the increasing problem. The new round was led by Andreessen Horowitz, with participation from Polychain and others. Founded in 2022, Story has raised $140 million to date, per the company. The new round reportedly values the company at $2.25 billion. IP theft is nothing new, but the rise of AI has heightened the stakes as generative AI models are ingesting copyrighted material -- without permission -- to train and learn. Story's blockchain network allows IP owners to store their IP on the platform, embedding terms to use it -- such as licensing fees -- into smart contracts. Basically, the blockchain aims to ensure owners are compensated when their IP is used. "Big Tech is stealing IP without consent and capturing all the profit," said S.Y. Lee, co-founder of Story. "First, they will gobble up your IP for their AI models without any compensation. ... The current state of AI completely destroys the incentive to create original IP for all of us." The funding announcement comes just a day after OpenAI announced a partnership agreement with Condé Nast to display content from the various publications it owns as AI companies are facing pushback from many media firms whose content they ingest. Last year, OpenAI and its biggest backer, Microsoft, were sued by The New York Times regarding copyright issues related to using the newspaper's intellectual property. Other startups and media companies also have come to some sort of partnership agreements to allow AI models to use their content to learn as content producers seek to project their IP.

Story raises $83M at a $2.25B valuation to build a blockchain for the business of content IP in the age of AI | TechCrunch

Companies like OpenAI, Anthropic and Stability AI have faced a lot of heat over how they have scraped and mis-used intellectual property owned by others when training and operating their foundational AI models. Now, a startup called Story that is building a blockchain-based platform to help IP owners track usage more effectively is announcing $83 million in funding in a bid to provide a counterbalance to that. In the words of co-founder and CEO S.Y. Lee, the aim is to build a more "sustainable" IP ecosystem fit for the next generation of digital consumers and builders. Its approach: to think of IP like Lego and to use blockchain to make that possible. "Anyone can fork and remix your IP permissionlessly while you capture the upside," Lee said in an interview. (A little ironic to call it "Lego", given the many IP battles Lego has faced over the years.) The round is being led by Andreessen Horowitz, specifically its a16z crypto division, with crypto investor Polychain Capital also participating, alongside Scott Trowbridge (the SVP of Stability AI), K11 Founder Adrian Cheng, and Cozomo de' Medici (the digital art collector who took on an alias to evoke the famous Renaissance family). It brings the total raised by the startup to $143 million. Being able to better capture the value of IP when it gets used has the potential to bring in a lot of money to license owners. In anticipation of its platform getting traction and working as envisioned, Story itself is realising some significant value, too. We understand from sources close to the company that the startup is now valued at $2.25 billion post-money. Story is building what it describes as an "IP blockchain" -- a system and platform by which it envisions that creators can assert their ownership on a piece of content, set usage parameters around that IP, and then let others license and use it. How exactly that will work in practice still remains to be seen, though. The plan is to use the funding to continue building out the product and launch it commercially later this year, Lee said. Up to now, the startup has been adding users on by way of a free, closed beta. Story says that more than 200 teams and "more than 20 million addressable IPs" are already registered on the platform, a result of partnerships with fashion design tool Ablo and Japanese comic platform Sekai and art collaboration startup Magma. Chris Dixon, who co-led the investment for a16z with Carra Wu, believes that new applications based on generative AI and other developments like it will be massively disrupting the economic models that traditionally underpinned how people made art or literature or music (or any other kind of "content" as it's typically described these days when it's digital). To keep the market for creativity thriving, a new way of monetizing needs to be introduced. "A new wave of AI-powered search engines give comprehensive answers instead of guiding users to websites. Social networks are increasingly populated by AI-generated images and videos," he writes in a blog post. "These AI systems were likely trained on original, human-created content but often don't credit or cite their sources. If there's no attribution or compensation, what incentive will there be to publish original creations on the open internet?" AI systems are just one area where content is being used, and will be used in the future, but they are a significant one, which is why Story is not the only player in this space. Just last week, another startup called Sahara AI announced $43 million in funding to build out its own approach to addressing the question of how best to track and monetise IP in the age of AI. "Story distinguishes itself from Sahara by focusing on the IP and data layer of AI solutions rather than the existing AI infrastructure stack," Lee told me in response to a question of how the two are different from each other. "While Sahara appears to target intellectual property concerns, these are mostly focused on data which is very different from the legal regime of IP. Story sees potential for partnership as the IP layer of solutions like Sahara and Ritual. We can become close partners." Lee himself has had a front-row seat to the story, so to speak, of content in the digital age. He himself started out as an enterprising journalist in the U.K. when he founded a platform called byline.com in 2014. He then built a crowdsourced, serialized fiction app called Radish (a competitor to the likes of Wattpad and Inkitt), which eventually he sold to Kakao for $440 million. Story -- which Lee co-founded with Jason Zhao, the CPO -- is, in a way, the natural progression of these previous experiences: "If you look at everything from, you know, Netflix to Disney, they pour billions of dollars into content, but really it's billions of dollars into marketing," he said. "It's kind of a zero sum war for attention to get more users and subscribers." His previous company, Radish, getting acquired for $440 million made him, he said, "rethink the dynamics of the market." "I was drawing a lot of my venture capital money out for marketing," he said. This is his attempt to build a different model to avoid that for creators of the future. Whether it will work, and whether creators want to use it, are questions that are yet to be answered. Those who believe they have a lock on how to invest for future scenarios are bullish, though. "What Bitcoin did for money and finance, Story is doing for content and IP," said Olaf Carlson-Wee, the founder and CEO of Polychain Capital, in a statement. "Web3's first phase was triggered by the 2008 financial crisis, leading to a revolution on money through networks like Bitcoin and Ethereum. Now, advancements in AI are triggering a second phase in Web3, which will revolutionize IP."

Blockchain Startup Story Raises $80 Million to Protect Intellectual Property From AI

The San Francisco-based firm announced the financing Wednesday (Aug. 21) on social platform X, saying it would use the money to help it build a blockchain designed to prevent artificial intelligence companies from unwarranted use of creators' intellectual property (IP), which Story referred to as "one of the world's biggest asset classes." "Training data, AI models, memes, UGC videos, game assets, character traits and more are all IP," the company said in the post on X. "Everything is IP." With the advent of AI, IP has only grown in value, the company added, saying that it serves as the foundational input for training AI large language models. "Put simply, without IP, AI is likely to hit a ceiling," the post said. "Story is creating a win-win future where creators can both protect and grow their IP in the age of AI." The company said its technology gives creators control over their IP, letting them set the economic terms for how AI can use their property. It can also protect IP by embedding terms connected to it into smart contracts. These are self-executing agreements written on blockchains designed to run without outside approval or human input once conditions are met. The modern concept of IP has been around for hundreds of years, although it wasn't until the late 20th century that it became part of most of the world's legal systems. As AI evolves, IP and copyright concepts like fair use might need to adapt to effectively handle generative AI-related cases. "I don't know that we need a full-blown overhaul of the laws just to accommodate this new technology," Mammen said. "But there may be some places where it's worth having a conversation about tinkering with the law or modifying the laws in certain ways."

Story Protocol Raises $80 Million in Bid to Shake Up IP Ownership in the AI Era - Decrypt

PIP Labs unveiled $80 million in Series B funding Wednesday to flesh out Story Protocol, a layer-1 network for licensing and maintaining intellectual property in the digital era. If crypto's pioneers sought to cut out financial intermediaries from online transactions, then Story has taken aim at a common source of friction for creatives: lawyers. Empowering artists is one of PIP Labs' biggest priorities, but the firm also seeks to address issues around artificial intelligence, as companies scrape the internet for heaps of data to train models. PIP Labs' Series B funding round was led by VC giant Andreessen Horowitz with participation from Polychain, also drawing investment from the likes of Walt Disney Imagineering executive Scott Trowbridge and the pseudonymous Cozomo de' Medici, an influential collector in the NFT space. Lifting PIP Labs' total fundraising figure to $140 million, the latest round follows the project's announcement last year with backing from Samsung Next and Paris Hilton's 11:11 Media. Andreessen Horowitz also led the previous round. "PIP Labs is building the necessary infrastructure for a new covenant in the AI age," Andreessen Horowitz Managing Partner Chris Dixon said in a press release. "Blockchains are perfectly suited for large-scale economic coordination, and Story's platform ensures creators are compensated." Story's public testnet launches next week, providing a first look at the technology where users can register IP and access others' work, while also setting parameters for licensing and monetization. When it comes to handiwork, such as viral memes, PIP Labs' co-founder and chief product officer Jason Zhao told Decrypt that Story Protocol could provide a more lucrative alternative than traditional IP models. "Your pen and paper lawyers, that's just a medieval, antiquated system," he said. "But a blockchain-based IP system can actually scale and maybe capture some of that value." Within the crypto industry, decentralized finance (DeFi) has flourished as developers look to create programmable systems for trading and lending assets. Dubbed IPfi, Zhao envisions a similar ecosystem, but intellectual property assets trade hands instead. With Story, IP assets will eventually be represented by NFTs, while licenses take the form of fungible tokens. "Can I trade the rights or the license to Thanos?" Zhao asked. "Can we actually tokenize the world's creativity and [...] create new sorts of markets and financing structures?" Using memes as collateral for loans would perhaps represent new ground for financial markets. Still, PIP Labs recognizes that a blockchain-based protocol can't fully replace lawyers yet. Creatives will have access to a so-called Programmable IP License, Zhao explained, if someone is leveraging their work outside the network. Effectively, the network has a system in place for accessing legal documents associated with registered IP, so creatives can take up legal action or strike deals in the real world. Zhao worked for two years at Google DeepMind, a research lab and subsidiary of the tech giant. As a result, a large part of Story's push is centered around AI. Using Story, Zhao said large language models can become registered as IP too, letting developers mix and match parts. Story would also provide tech companies with data free of legal concerns, while simultaneously rewarding creatives. The New York Times sued OpenAI last year, for example, alleging the tech firm trained its AI model using the publication's copyrighted work. "They're just taking it for free, and then they're charging people to use their service," Zhao said of user-generated content on the internet, from Yelp reviews to Reddit posts. "If this continues, basically what happens is there's no incentive for creators to do anything."

Andreessen Horowitz leads $80 million bet on startup seeking to tame AI with copyright

The arrival of the internet unleashed a wave of creativity as users found new ways to make and mix culture, but it also delivered an economic blow to authors, musicians and news outlets. Much of the revenue that had once flowed to content producers got gobbled by tech platforms like Facebook and Google. Now, at the dawn of the AI age, many fear the same type of economic disruption is poised to happen again. This time around, the threat to creators comes in the form of Silicon Valley companies racing to train their AI systems by helping themselves to content available on the web -- often without seeking permission. In response, a startup called Story is proposing a radical solution: remaking the intellectual property regime in order to let creators rapidly register their works on a blockchain, and use it to track and distribute royalties. The idea of a startup seeking to blend three incredibly complex fields -- AI, copyright and blockchain -- may sound like a longshot. But the duo behind Story has already gained enough traction to raise an $80 million Series B funding round, which it announced on Wednesday, following an early round that raised around $54 million. The crypto division of venture capital giant Andreessen Horowitz led the round, which also drew contributions from Stability AI SVP Scott Trowbridge, K11 founder Adrian Cheng and digital art collector Cozomo de' Medici. Story is the brainchild of S.Y. Lee, an Oxford-educated South Korea native, and Jason Zhao, who studied at Stanford and spent two years at the Google AI subsidiary DeepMind. The pair came to believe that the existing intellectual property regime has struggled to keep up with the fast-changing internet landscape, and that an entirely new approach is necessary to handle the onslaught of AI. Lee says creators, who depend on search engines and social media platforms to help consumers discover their work, are particularly vulnerable as tech giants seek to replace existing content with AI-generated material. "AI can be creative but also destructive by hijacking your traffic," he says. "Google was nice in giving traffic to your website, but not for much longer." In order to stave off the tech giants, Zhao and Lee are building a service that will let creators rapidly wrap intellectual property around their works. In order to carry this out, they are using an entity called PIP Labs, which is the primary contributor to the Story blockchain. Story itself, which is built to be compatible with the widely used Ethereum blockchain, is currently in so-called testnet mode, and is slated to be available to the public in November. The idea is not only for Story to serve as an IP registrar of sorts, but also a forum where creators can use smart contracts to designate who is able to access the work, and to collect and pay royalties on behalf of contributors. In this way, Lee says, Story will act as a "QR code for IP" and offer modular units that amount to a sort of "Lego IP." As for who is using their service, the Story founders pointed to those who use the popular online art platform Magma. They also described users who might want to create their own spin on a Nike sneaker design or develop a fictional world inspired by Harry Potter characters. For these type of examples, Lee and Zhao said PIP Labs envisions coming to arrangements with companies where users with large fan bases receive permission to license and sell works derived from their brands. As PIP Labs put it in a press release announcing the funding round: "Creators not only use Story to declare the sovereignty of their IP and define usage parameters around their IP, but also to bootstrap a global network that turns fans into evangelists by remixing, selling, and distributing their IP." The idea of a fast and easy-to-use IP regime designed for the AI age sounds great -- in theory at least. In practice, Story and its users must contend with the reality that powerful IP holders, such as Disney or fashion giant LVMH, are unlikely to make a startup's blockchain part of their legal regime. Meanwhile, neither Silicon Valley tech giants nor prominent IP attorneys are likely to clamor for a service like Story. Making the startup's task more difficult still is the fact that portions of intellectual property law are currently unsettled -- such as the scope of copyright's fair use doctrine or the rules around digital trademarks. How will Story's "Lego IP" blockchain account for new laws, regulations and court rulings that narrow or expand the scope of intellectual property? The Story founders say they are not daunted by these obstacles, and note they are taking the legal nuances of intellectual property seriously. Their efforts on this front include retaining IP lawyers at the Los Angeles office of the white shoe law firm Latham & Watkins. Lee and Zhao may also take some encouragement from the fact that others have succeeded in building new intellectual property regimes for the digital age. One notable example is the Creative Commons licensing regime -- a set of rules and online legal tools first launched in 2002 that offer any internet user an easy way to share and remix web-based content. Zhao says Story is partially inspired by the Creative Commons model, and that it is designed to offer similar features -- but also a way for users to earn and distribute money. He also concedes that Story is unlikely to attract powerful establishment players like Disney. Instead, he says the platform is built to appeal to creators of "second tier IP" who are creating large volumes of data sets, memes, character traits and so on. Zhao says that the generation of creators who come of age using AI tools are akin to the generation of social media stars who came before and were likewise not taken seriously by legacy brands. "It's just like YouTube -- it didn't start with people asking Steven Spielberg to post stuff. It started with people uploading with their phones and, in 15 years, you get MrBeast."

Startup using blockchain to prevent copyright theft by AI is valued over $2 billion after fresh funding

Generative AI models require huge amounts of training data to enable their systems to produce advanced outputs. But the data that goes into them is often from sources where copyright restrictions are in place. San-Francisco-based startup Story said Wednesday that it raised $80 million of funding for a blockchain designed to prevent artificial intelligence makers like OpenAI from taking creators' intellectual property without permission. The round values the two-year-old company at $2.25 billion, sources familiar with the matter told CNBC. The sources preferred not to be named as the information has not been made public. Story said that it raised the funds in a Series B round -- typically the third major round of funding in a private startup's growth journey after seed and Series A -- led by Andreessen Horowitz, which is also known as a16z. Crypto-focused venture capital firm Polychain and Brevan Howard, the investment fund of British billionaire hedge fund manager Alan Howard, also invested.