Apple eyes media deals for AI development

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Tech giant Apple (NASDAQ: AAPL) is reportedly discussing with news agencies and publishers the formation of a partnership that would allow the company to use the publishers’ content to develop a generative artificial intelligence (AI) system.

Apple is reportedly seeking a multiyear agreement, with a price tag of $50 million, which would grant Apple access to both newly published and archived content, according to individuals familiar with the matter.

So far, Apple has targeted media powerhouses Condé Nast, home to Vogue and The New Yorker, NBC News, and IAC (NASDAQ: IAC), which owns People, The Daily Beast, and Better Homes and Gardens.

Although Apple has reached out to these companies, its offer has not been warmly received. Several executives reported that they are apprehensive about the scope of the proposed licensing agreements, fearing that Apple’s overly broad terms will lead to legal issues associated with the tech giant’s use of their intellectual property.

In addition to the unfavorable contract, the popularity of generative AI has made news organizations fearful that the technology could disrupt traditional news consumption patterns, diverting audiences away from their native websites to AI-driven/delivered platforms, which would jeopardize the financial models that sustain most media agencies.

Although some agencies fear AI for this reason, others see it as a benefit and embrace AI partnerships.

Why media agencies want AI partners

This is not the first instance of a generative AI provider partnering with a media agency to train its models and incorporate or reference news in its outputs. Recently, OpenAI partnered with Axel Springer—owner of Politico, Business Insider, and European properties Bild and Welt—to integrate Axel Springer content into OpenAI‘s ChatGPT to enrich the AI’s responses with current news summaries.

In an industry like media, where technological advances significantly impact business models, it is essential to keep up with trends in technology, particularly those related to how readers search for and receive information.

Decades ago, the most effective method to inform an audience about current events was the daily newspaper and evening news, but now that a majority of the world has hyper-connected devices with them at all times (smartphones and laptops), the best method to inform an audience about current events is through social media, landing pages (websites), apps that have push notifications, and search engines.

Currently, most people use AI as a glorified search engine, entering questions into AGI chatbots that they would typically ask Google (NASDAQ: GOOGL). Through an AGI chatbot, the user can have their questions answered more efficiently and accurately, getting directly to the root of their query without having to sift through the many responses a traditional search engine would require them to look through before they find the right answer.

If a media agency’s content was used in an AI’s output, it could significantly boost their news distribution and result in higher readership as more people use chatbots as search engines.

Apple’s strategy for AI

Apple’s generative AI strategy and initiatives remain vague at this point. But it is clear that the company is gearing up to compete in the AI space. The firm did have a head start when it released one of the very first virtual assistants “Siri” back in 2011. However, over ten years have passed since its launch, and the feature remains unpopular among most Apple users.

Although Siri can be considered underwhelming or maybe even a failure, Apple might have the upper hand in the AI race distribution. If Apple’s AGI is implemented into every Apple device via a software update, the over 2 billion iPhones, iPads, and Apple computers worldwide will run Apple’s AI, which means it could have significant traction right out of the gate.

Distribution alone does not guarantee success; the key will be delivering an experience so compelling and useful that it becomes integral to users’ daily lives. Without continuous improvement and unique features that resonate with its audience, Apple’s AI could risk fading into the background, just like Siri did.

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