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- OpenAI has been snapping up media partnerships.
- On Tuesday, the AI company announced a new deal with magazine giant Condé Nast.
- The latest partnership comes amid Wall Street worries that the AI bubble may be close to bursting.
OpenAI on Tuesday announced its latest partnership with a global media brand, this time inking a deal with magazine giant Condé Nast.
Condé Nast owns publications such as Vogue, The New Yorker, Vanity Fair, and Wired.
"With the introduction of our SearchGPT prototype, we're testing new search features that make finding information and reliable content sources faster and more intuitive," OpenAI said in a statement announcing the partnership. "We're combining our conversational models with information from the web to give you fast and timely answers with clear and relevant sources. SearchGPT offers direct links to news stories, enabling users to easily explore more in-depth content directly from the source."
The company plans to integrate these features directly into ChatGPT in the future, the statement added.
The terms of the partnership were not announced — a common theme among deals signed between OpenAI and publishers, including Associated Press, The Atlantic, and Axel Springer, the parent company of Business Insider.
The New York Times is among those not making deals with OpenAI. Late last year, the publisher filed a suit against the company for "billions of dollars in statutory and actual damages," accusing the AI leader of violating copyright law through the "copying and use of The Times's uniquely valuable works."
When reached for comment by Business Insider, a representative for Condé Nast shared an internal memo from CEO Roger Lynch sent to company employees. In it, the media executive acknowledged that AI is "rapidly changing" how audiences discover and consume information, which contributed to the need for the deal.
"Over the last decade, news and digital media have faced steep challenges as many technology companies eroded publishers' ability to monetize content, most recently with traditional search," Lynch wrote. "Our partnership with OpenAI begins to make up for some of that revenue, allowing us to continue to protect and invest in our journalism and creative endeavors."
Lynch, in his memo, indicated OpenAI is "very committed" to working transparently with publishers "so that the public can receive reliable information and news through their platforms."
Lack of transparency in OpenAI's media deals
But not everyone is convinced — including the writers who create the content training the AI.
"The growing encroachment of AI on journalism is a significant concern for our NewsGuild of New York members," Susan DeCarava, president of NewsGuild of New York, which represents unionized Condé Nast workers, said in a statement after news of the Condé Nast deal broke. NewsGuild representatives directed BI to DeCarava's statement when reached for comment for this story.
DeCarava continued: "We expect Condé management to be transparent with us about how this technology will be used and the impact it may have on our work. We are seeking additional details on Condé's OpenAI deal to ensure our members' rights are protected."
In May, NewsGuild journalists reacted similarly to news of an OpenAI partnership with The Atlantic and Vox Media. They indicated that workers were troubled by the lack of transparency about what the agreement entails and how it will affect their work.
"Management should immediately make the terms of the deal available to Atlantic staffers and then convene an all-hands meeting to answer our questions honestly, clearly, and without spin," the union statement read.
When reached for comment, representatives for OpenAI directed BI to a statement by Brad Lightcap, the company's COO.
"We're committed to working with Condé Nast and other news publishers to ensure that as AI plays a larger role in news discovery and delivery, it maintains accuracy, integrity, and respect for quality reporting," Lightcap said.
Is the AI bubble about to burst?
The news of the OpenAI and Condé Nast partnership comes amid some on Wall Street worrying that the AI bubble may be about to burst. The concern has grown in recent weeks, garnering cautionary reports from Goldman Sachs and VC firms, including Sequoia Capital, though many remain bullish on the industry.
Investors in artificial intelligence have spent tens of billions of dollars building data centers and developing semiconductors needed to run and train large language models. But the resulting product developments haven't come close to recouping their investments, and the path toward monetizing AI chatbots, search functions, and coding assistants — many of which remain fraught with bugs, errors, and hallucinations — remains murky.
"Many dot-com companies that drove the internet change went broke doing it," Erik Gordon, a professor at the University of Michigan's Ross School of Business, previously told BI. "Many AI companies driving as big a change will go broke or lose half their value."
Publishers have been especially hard hit by recent advancements in AI technology, with generative AI perceived as an existential threat to those who create content themselves.
The Associated Press reported that the employment firm Challenger, Gray, and Christmas estimated 2,681 journalism jobs were lost in 2023, a number that has continued to climb this year.
Jeff Jarvis, author of "The Gutenberg Parenthesis: The Age of Print and its Lessons for the Age of the Internet," told the outlet there is an "inevitability" to the impact of new tech on the publishing industry, which has long clung to its old business models and methods.
"I'm optimistic in the long run. But in the short run, it's going to be ugly," Jarvis said.