Gross’s Calculus he made a name for himself in the tech world in the ’90s, when he came up with a novel way for search engines to make money from advertising. Under his pricing system, advertisers paid when people clicked on their ads. Now the “pay-per-click” guy has launched a startup called ProRata with a bold, probably unrealistic business model: “AI pay-per-use.”
Gross, who is CEO of the Pasadena, Calif.-based company, doesn’t mince his words about the generative AI industry. “It’s theft,” he says. “They’re stealing and laundering the world’s knowledge for their own benefit.”
AI companies often argue that they need huge datasets to build cutting-edge generative tools and that scraping data from the internet—whether text from websites, videos or subtitles from YouTube, or books stolen from pirated libraries—is legally permissible. Gross doesn’t buy that argument. “I think it’s nonsense,” he says.
So do many media executives, artists, writers, musicians and other rights holders who oppose it – it’s challenging to keep up with the constant flood of copyright lawsuits filed against AI companies alleging that the way they operate amounts to theft.
But Gross believes ProRata offers a solution that beats legal battles. “To be fair — that’s what I’m trying to do,” he says. “I don’t think this should be resolved by lawsuits.”
His company aims to create revenue-sharing deals so that publishers and individuals get paid when AI companies employ their work. Gross explains it this way: “We can take the output of generative AI, whether it’s text, an image, music, or a video, and break it down into its components to figure out where they came from, and then assign a percentage of credit to each copyright holder, and then pay them accordingly.” ProRata has filed patents for algorithms it has created to assign credit and make the appropriate payments.
This week, the company raised $25 million shot with a number of high-profile partners, including Universal Music Group, the Financial Times, The Atlantic, and media company Axel Springer. He’s also landed deals with big-following authors including Tony Robbins, Neal Postman, and Scott Galloway. (He’s also teamed up with former White House communications director Anthony Scaramucci.)
Even journalism professor Jeff Jarvis, who believes scraping the web to train AI is fair employ, has signed on. He tells WIRED that it’s wise for people in the news industry to band together to ensure AI companies have access to “trustworthy and timely information” that they can include in their results. “I hope ProRata can open up a discussion about what could evolve into an API,” he says. [application programming interfaces] “for different content,” he says.
After the company’s initial announcement, Gross says he received a flood of messages from other companies asking to sign up, including a text message from Time CEO Jessica Sibley. ProRata has struck a deal with Time, the publisher confirmed to WIRED. It plans to strike deals with popular YouTubers and other internet stars.
The key word here is “plans.” The company is still in its early stages, and Gross is talking about massive play. As a proof of concept, ProRata is launching its own subscription-based chatbot-style search engine in October. Unlike other AI search products, ProRata’s search tool will only employ licensed data. There’s nothing scraped with a web crawler. “Nothing from Reddit,” he says.