AI and Licensing: Courts, Contracts and the Tension over Content

Navigating Copyright and the Future of Media in the Age of AI At a moment when artificial intelligence companies are signing multimillion-dollar licensing agreements and fighting headline-grabbing lawsuits, the tension between AI and creative industries is at an inflection point. by Celia Milch, National Press Foundation At a moment when artificial intelligence companies are signing multimillion-dollar licensing agreements and fighting headline-grabbing lawsuits, the tension between AI and creative industries is at an inflection point. That tension drove the discussion during NPF’s webinar, “AI and Licensing: A New Frontier.” The panel brought together legal, economic, policy and reporting perspectives to discuss the challenges at play in this debate and what journalists should be watching next. Here are highlights from the conversation: Litigation vs. Licensing: A Market in Transition Major publishers like The New York Times and Disney are suing AI developers over copyright infringement, while other companies, including NewsCorp and The Atlantic, are striking licensing deals with the same firms. What does that split signal? For Professor Jonathan Barnett, director of the Media, Entertainment and Technology Law Program at USC, it signals uncertainty. “The fact that we see some model developers entering into content licensing deals suggests that they are not as confident in their ability to prevail in these infringement litigations,” Barnett said. “Otherwise, they wouldn’t enter into those licensing relationships.” Barnett pointed to the Supreme Court’s 2023 Andy Warhol Foundation v. Goldsmith decision as a turning point in this conversation. By emphasizing “market harm” in the fair use analysis, the Court may have signaled to AI developers that reliance on fair use defenses is not guaranteed. Signs of a Functioning Market? While the law remains unsettled, professor and economist Michael D. Smith of Carnegie Mellon University, said he sees potential in the overall number of these licensing agreements. License agreements have grown rapidly in the past three years, he noted, increasing from a handful in early 2023 to hundreds in 2026. For Smith, that’s a promising sign. “Markets are good,” he said, also arguing that the ruling that found Napster guilty of copyright infringement eventually led to legal streaming models like Spotify and Netflix. “Let’s see if we can get there.” But Smith also raised a warning that lingered over the entire discussion: what happens to creative labor along the way? “What happens if we get rid of the jobs that allow you to bang your head against the wall for two decades before you get your big break?” he said. For Barnett, this could become a sobering reality. If courts ultimately side with AI developers on fair use, the information ecosystem could “bifurcate,” he explained. Freely available content might decline in quality as revenues dry up, while high-quality, verified information becomes concentrated in paid products. “It would have an adverse impact on society, that goes beyond economics because of the unique role that’s played by the press in informing the public,” Barnett said. Policy, Consistency and Technical Solutions Hodan Omaar, a senior AI policy manager at the Information Technology and Innovation Foundation, urged journalists to interrogate the moral framing around AI and creative labor. “If we’re going to update the law, if we’re going to update our moral argument, let’s do it consistently,” she said. “People are looking at AI systems and asking, ‘is it fair that AI companies can profit from creative labor without permission?’ … But if you replace AI company with almost any other type of company, you start to see that this dynamic, which is at the heart of the moral debate, isn’t new.” Omaar also suggested the future may depend not only on courts and contracts but on technical solutions, including emerging tools that could give creators more granular control over how their content is accessed and attributed. For working journalists, however, the practical questions are immediate. Sara Guaglione, a senior media reporter at Digiday, urged journalists to follow the money any time a new licensing deal is announced. Speakers: - Jonathan Barnett, Director, Media, Entertainment and Technology Law Program, University of Southern California School of Law - Sara Guaglione, Senior Media Reporter, Digiday - Hodan Omaar, Senior Policy Manager, Center for Data Innovation, Information Technology & Innovation Foundation - Michael D. Smith, Professor, Information Technology and Public Policy, Carnegie Mellon University; Co-director, Initiative for Digital Entertainment Analytics This event is sponsored by The Copyright Alliance and The Next Solutions Group. This video was produced within the Evelyn Y. Davis studios. NPF is solely responsible for the content.