Doug Preston, known for the popular Agent Pendergast novels, wants authors to work together as a group to stop AI companies from stealing their books. The first step, Preston says, is to sign up with Created by Humans, or CbH, an AI rights licensing platform that just raised a $5.5 million seed round.
Preston said he has published about 40 books, including the bestseller “Cabinet of Curiosities." (Lee Child co-wrote the Agent Pendergast series with Preston.) Nearly all the books, except for the most recent, have been ingested by AI companies without his consent, he said. “No permission, no compensation,” Preston told Fortune.
Preston realized in 2023 that authors and developers need some sort of licensing system. He first heard of Created by Humans, the startup from Trip Adler (founder of document sharing platform Scribd), from the Authors Guild. Created by Humans really understands authors, Preston said.
“Authors must come together now and negotiate with AI companies as a block.,” said Preston.
Launched in June, Created by Humans provides a platform that connects rights holders, like authors, and AI developers. Authors can sign up, claim their works, and note which licenses they’d like to grant to AI developers, said Jen Singerman, a former Scribd executive, who is a co-founder and COO of Created by Humans.
“We’re trying to solve how copyright works in the AI world,” said Adler, who is CEO of Created by Humans. “There’s lots of conflict. Creators are really frustrated with how content is being used without their permission.”
Created by Humans emerged from so-called beta on Jan. 14 and currently has eight employees but is actively hiring, Adler said. The startup plans to add five to eight people this year across engineering and growth.
More than 100 authors have signed up with Created by Humans, including Preston as well as noted tech writer Walter Isaacson and best-selling romance writer Sylvia Day. Preston and Isaacson are also investors. The Authors Guild, the professional organization that represents more than 15,000 authors and of which Preston is a former president, partnered with Created by Humans in October. "We urgently need to give control back to authors and their publishers, and licensing is the means to accomplish that going forward,” said Mary Rasenberger, Authors Guild’s CEO, in an Oct. 9 statement endorsing Created by Humans.
Created by Humans has raised a total of $11 million in funding, including a soon to be announced $5.5 million seed round that was led by Giant Ventures. The seed included participation from Uncommon Capital; Emmett Shear, co-founder of Twitch and interim CEO of OpenAI; Kyle Vogt, co-founder of Cruise Automation; Dropbox co-founder Drew Houston; Slack co-founder Cal Henderson and Cameron Yarbrough, Torch’s co-founder. A pre-seed round, led by Floodgate and Craft Ventures, collected $5.5 million in June.
CbH CEO Adler said the startup plans to use the new funding on product development and platform growth. "[CbH is] currently AI licensing a book every 5 minutes!” Adler said in an email.
A revolution for books
All the conflict has led to several lawsuits alleging copyright infringement, many of them against OpenAI. Late last year, OpenAI, which is backed by Microsoft and Thrive Capital, secured a $157 billion valuation, Fortune reported in October.
Preston, for example, is part of an Authors Guild class action lawsuit against OpenAI and Microsoft, which is still in the early stages. OpenAI and Microsoft are also facing legal action from the New York Times, while David Millette, a YouTube content creator, has filed class action lawsuits against OpenAI and Nvidia for using YouTube videos to train their AI models without consent. The Intercept Media has also sued OpenAI and MSFT in a copyright lawsuit.
"We collaborate with and learn from creators, creative professionals and companies around the world who are using OpenAI’s technology to unlock new possibilities," said an OpenAI spokesman in an emailed response to Fortune. "Our publisher partnerships illustrate this transformation -- streamlining workflows, reimagining business operations, enhancing user experiences, and opening new ways to connect with audiences through ChatGPT."
Created by Humans aims to serve as a bridge between these factions, namely the creators, publishers and AI companies, Adler said. The platform, however, is still working out its pricing model, Adler said. “To a large extent it will be up to our community,” he said.
A.I. licensing could be very lucrative for authors, said Preston. A.I. companies use books to train their large language models, or LLMs and every iteration of LLMs needs to ingest books all over again, Preston said. ChatGPT is currently on version four, with version five expected this year. “[ChatGPT] will need to go to the database and freshly ingest books again. They’ll have to pay again; it’s not one time fee. This is something that should be a source of continuing income for authors and the entire creative community,” Preston said.
“It’s a little more nuanced than this, but we believe AI developers need a new license for each model they train,” added CbH’s Singerman.
Publishing is undergoing a transformative moment, like how Napster changed the music industry. The music sector, during the 1990s, was profitable and expanding but this changed in 1999 with the launch of Napster, which allowed users to share millions of songs for free. Music companies used legal action to fight back against Napster, which filed for bankruptcy in 2002, and was superseded by the likes of Spotify, a music streaming platform that helped revitalize the music industry and significantly cut down on piracy.
Tommy Stadlen, Giant’s co-founder and general partner, said Created by Humans is looking to be the Spotify of the publishing world. “Without Created by Humans, authors are heading to a Napster-esque world where their intellectual property is swallowed up without recompense by a radical new technology,” Stadlen said.
