[Valuable Intellectual Property] "Fair Distribution According to Copyright" AI Company Receiving 33 Billion Won Investment

US AI Startup 'Prorata'
Establishes AI Training Data Compensation System
Contrasts with Music Market Facing Copyright Lawsuits

A company has emerged that recognizes copyright for artificial intelligence (AI) training content and is willing to pay for it. It is the American generative AI startup ProRata. This company has attracted attention by presenting a vision to implement a ‘fair market order’ even before the official launch of its AI service.

ProRata Company Introduction. Emphasizing fair compensation for content owners in the AI era. [Source=ProRata Official SNS]

According to foreign media on the 19th (local time), ProRata signed content licensing agreements with major media outlets such as the Financial Times (FT), Fortune, and The Atlantic, promising to share profits. ProRata plans to launch its own chatbot this fall and will share half of the subscription revenue with its licensing partners. The goal is to sign contracts with various premium content owners such as writers, record companies, and artists in the future.

In particular, the company announced that it has developed patented technology that can determine how much the content was used in chatbot responses and distribute profits equally to content owners. It is expected that this technology will help mediate transactions between AI companies and content providers.

ProRata is regarded as having taken a step forward in building a ‘fair AI economy’ by respecting the value of content and properly compensating copyright holders. Thanks to this, it recently attracted Series A investment amounting to $25 million (approximately 33 billion KRW).

ProRata’s approach contrasts with music generative AI companies such as Suno and Udio, which are engaged in legal disputes with major record companies over allegations of unauthorized use of music tracks.

Domestic music generation AI startup 'Poja Labs' directly hired over 20 music artists to operate their business free from copyright issues. [Source=Poja Labs Official Blog]

Major record companies such as Sony Music, Universal Music, and Warner Records claim that their artists’ music tracks were used for AI training without permission.

Suno and Udio acknowledged using the record companies’ content in their response submitted to the U.S. federal court earlier this month. However, they argued that this falls under ‘fair use’ under U.S. copyright law. They pointed out that the record companies view the creation of original music by AI as a threat to the market and that this is an attempt to broadly apply intellectual property rights.

The issue of AI model training and copyright remains an unresolved challenge. The Atlantic signed a content licensing agreement with OpenAI but criticized the lack of transparency in the contract, with some internally calling it a ‘deal with the devil.’ Signing a contract does not guarantee everything will go smoothly.

To completely avoid music copyright issues, there is even an AI startup that hires composers. It is Poza Labs, invested in by CJ ENM. Users can generate various music by utilizing sample data of music tracks created by composers affiliated with Poza Labs. CJ ENM also invested in Poza Labs to reduce copyright fees, as more than 100 songs are used per episode in entertainment programs. This can be seen as a desperate measure to reduce program production costs.