San Francisco-based startup Story announced on Wednesday that it has secured $80 million in Series B funding to enhance its blockchain technology aimed at protecting creators’ intellectual property from misuse by artificial intelligence (AI) systems. The company’s valuation has reached $2.25 billion, as reported by sources who preferred to remain anonymous.

The funding round, led by Andreessen Horowitz (a16z), also saw investments from Polychain, a crypto-focused venture capital firm, and Brevan Howard, the investment fund of British billionaire Alan Howard. Story’s blockchain network is designed to help creators secure their intellectual property by recording and enforcing ownership rights through smart contracts.

“Now it’s turned from IP into IP Lego,” explained SY Lee, Story’s co-founder and CEO, highlighting the platform’s ability to simplify the process of licensing and royalty-sharing without traditional intermediaries. “You don’t need to go through lawyers. You don’t need to go through the agents. You don’t need to do this very lengthy business development negotiation. You just embed your licensing, royalty-sharing terms into small contracts.”

Story’s technology enables copyright holders to make their IP “programmable,” allowing for automatic enforcement of terms such as usage rights and fees. This approach aims to address the growing concern of AI systems, like OpenAI’s ChatGPT, potentially exploiting copyrighted materials without proper compensation.

Lee criticized major tech companies for their use of copyrighted content in training AI models without adequate remuneration to the original creators. He pointed to recent legal disputes, such as The New York Times’ lawsuit against Microsoft and OpenAI over copyright infringement, as evidence of the broader issue.

In response to the concerns surrounding AI and intellectual property, Story’s technology offers a solution to ensure creators are properly compensated. The company charges a network fee for actions performed on its platform and plans to use the new funding to expand its IP network and partner with additional developers.

Lee emphasized the importance of fair compensation for intellectual property to sustain AI development. “You need great IP going into AI to have a sustainable growth in AI. Without great human-created data, AI models are not going to be able to train themselves and improve themselves,” he said.

As Story works to build out its infrastructure and support more developers, it joins a small group of startups focused on combating IP theft by AI. The company’s efforts reflect a growing recognition of the need to balance technological advancement with respect for intellectual property rights.

(Adapted from BeSmart.com)