Story Protocol raises $80 million to shake up IP ownership in the AI ​​era

PIP Labs on Wednesday announced $80 million in Series B funding to further expand Story Protocol, a Layer 1 network for licensing and maintaining intellectual property in the digital age.

While the crypto pioneers sought to exclude financial intermediaries from online transactions, Story has targeted a common source of friction for creatives: lawyers. Empowering artists is one of PIP Labs’ biggest priorities, but the company is also trying to tackle problems related to artificial intelligence as companies scour the internet for reams of data to train models.

PIP Labs’ Series B funding round was led by VC giant Andreessen Horowitz, with participation from Polychain, and also attracted investment from the likes of Scott Trowbridge, CEO of Walt Disney Imagineering, and the pseudonymous Cozomo de’ Medici (German: Cozomo de’ Medici)an influential collector in the NFT space.

The total amount of funds raised by PIP Labs is $140 million. The latest round follows the notice last year with backing from Samsung Next and Paris Hilton’s 11:11 Media. Andreessen Horowitz also led the previous round.

“PIP Labs is building the necessary infrastructure for a new covenant in the AI ​​era,” said Chris Dixon, managing partner of Andreessen Horowitz, in a press release. “Blockchains are perfectly suited for large-scale economic coordination, and Story’s platform ensures that developers are compensated.”

Story’s public testnet will launch next week, offering a first look at the technology, where users can register intellectual property and access the work of others while setting parameters for licensing and monetization. When it comes to handicrafts like viral memes, said Jason Zhao, co-founder and chief product officer of PIP Labs Decrypt that the Story protocol could be a more lucrative alternative than traditional IP models.

“Your lawyers with pen and paper is just a medieval, outdated system,” he said. “But a blockchain-based IP system can actually scale and maybe capture some of that value.”

Within the crypto industry, decentralized finance (DeFi) has flourished as developers seek to create programmable systems for trading and lending assets. Zhao envisions a similar ecosystem called IPfi, but where intellectual property changes hands instead. With Story, intellectual property will eventually be represented by NFTs, while licenses will take the form of fungible tokens.

“Can I trade the rights or the license to Thanos?” Zhao asked. “Can we actually tokenize the world’s creativity and (…) create new types of markets and financing structures?”

Using memes as collateral for loans would potentially be new territory for financial markets. Still, PIP Labs recognizes that a blockchain-based protocol cannot yet fully replace lawyers.

Creators have access to what’s called a programmable IP license, Zhao explained, when someone uses their work outside the network. In fact, the network has a system for accessing legal documents related to registered intellectual property, allowing creators to take legal action or do business in the real world.

Zhao spent two years working at Google DeepMind, a research lab and subsidiary of the tech giant, so much of Story’s efforts are focused on AI. With Story, Zhao says, large language models can also be registered as intellectual property, allowing developers to combine parts however they want.

In addition, Story would provide data to technology companies without legal concerns while rewarding creatives. The New York Times sued Last year, for example, OpenAI claimed that the technology company had trained its AI model using copyrighted works from the publication.

“They just take it for free and then charge money to use their service,” Zhao said of user-generated content on the internet, from Yelp reviews to Reddit posts. “If that continues, there’s basically no incentive for creators to do anything anymore.”

Edited by Andrew Hayward