Bill Gross made a name for himself In the 1990s, the tech world came up with a novel way for search engines to make money from advertising. Under his pricing scheme, advertisers would pay when people clicked on their ads. Now, the “pay-per-click” man has founded a startup called ProRata, which has a bold and possibly utopian business model: “Pay-per-use AI.”
Gross, chief executive of the Pasadena, California-based company, doesn’t mince words when talking about the generative AI industry. “It’s a rip-off,” he says. “They’re stealing and laundering the world’s knowledge for their own profit.”
AI companies often argue that they need vast amounts of data 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 pirate libraries — is legally permissible. Gross doesn’t buy that argument. “I think it’s nonsense,” he says.
The same goes for many media executives, artists, writers, musicians and other rights holders who are holding out: it’s hard to keep up with the constant wave of copyright lawsuits filed against AI companies, alleging that the way they operate amounts to theft.
But Gross believes ProRata offers a solution that avoids legal battles. “To make it fair, that’s what I’m trying to do,” he says. “I don’t think this should be resolved with lawsuits.”
His company aims to set up revenue-sharing agreements so that publishers and individuals get paid when AI companies use their work. Gross explains: “We can take the output of generative AI, whether it’s text, an image, music, or a movie, and break it down into its components to figure out where it came from, and then give a percentage of attribution to each copyright holder and pay them accordingly.” ProRata has filed patent applications for the algorithms it has created to assign attribution and make the corresponding payments.
This week, the company, which has raised $25 million, thrown out with a host of high-profile partners, including Universal Music Group, the Financial Times, The Atlantic and media company Axel Springer. He has also struck deals with authors with huge followings, including Tony Robbins, Neal Postman and Scott Galloway. (He has also partnered with former White House communications director Anthony Scaramucci.)
Even journalism professor Jeff Jarvis, who believes that crawling the web to train AI is a legitimate use, has joined in. Speaking to WIRED, Jarvis says it’s smart for people in the news industry to come together to give AI companies access to “credible, current information” to put into their products. “I hope ProRata can open up a discussion about what could become APIs (application programming interfaces) for various content,” he says.
Following the company’s initial announcement, Gross says he received a flood of messages from other companies asking him to join the company, including a text from Time CEO Jessica Sibley. ProRata landed a deal with Time, the publisher confirmed to WIRED. It plans to pursue deals with high-profile YouTubers and other individual internet stars.
The key word here is “plans.” The company is still in its early stages, and Gross is talking a lot. As a proof of concept, ProRata will launch its own chatbot-style subscription search engine in October. Unlike other AI search products, ProRata’s search tool will exclusively use licensed data. Nothing is scraped by a web crawler. “Nothing from Reddit,” he says.
