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Hello, ladies.
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Welcome to this week's episode of the hourly to exit podcast.
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I have a very special guest today.
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My law school classmate, joy Butler joy.
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Welcome.
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And thank you so much for joining us.
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Thank you, Aaron.
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I am honored to have been asked to be a guest.
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Well, we're very excited to have you because AI could not be more
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top of mind, for this audience.
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And so as someone who has written extensively and spoken
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about AI, I definitely wanted to have you on to, , go deep.
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So before we get started, would you introduce yourself to the audience?
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Sure.
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so as you already shared, I am an attorney and in my law firm practice,
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I provide product counsel services.
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that essentially means I provide a combination of strategic and legal advice.
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To companies that are, going into new lines of business or launching new
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products new features of existing products or forming strategic partnerships.
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And I come by that from, two areas of wall where I have a deep, in depth
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knowledge, and that includes the technology side where I have worked on
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and, help to structure probably literally, over 1000 contracts over the course
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of my career for, all the contracts 1 would need when 1 is doing business.
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Online and in digital technology, including end user license arrangements
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and terms and conditions and the other prong of my in depth legal
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knowledge concerns entertainment and copyright and this is where
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you and I overlap quite a bit.
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so I work on a lot of, creative content contracts also advise companies on.
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Protecting their, copyrights and trademarks and, work with companies
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that want to use, someone else's content, doing a lot of work
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in the rights clearance area.
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just to give your audience a little more of a flavor of the
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types of projects I might work on, most of them are in the digital
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technology and entertainment space.
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for So a couple of projects include helping an entertainment social media
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network launch, working with an commerce retail site that was incorporating a lot
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of album cover work and original artwork.
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another was, an ad supported, stock simulation game.
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And here's something that may resonate with your audience, helping
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a professional in the finance area take, this niche financial service
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he was offering and, convert it into an online software as a service.
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product.
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so, that is me in a nutshell.
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Awesome.
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When did you first when I think even tell you the day I first heard about AI.
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Where were you when you first heard about it?
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What was the context and what were your initial thoughts?
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I don't remember, the first time I heard about, JATGPT.
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Right.
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That may be what you're referring to.
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Yeah.
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but, actually within my practice, I have for quite some time been experimenting
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with, trying to take some of my knowledge And, develop it into, digital tools,
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making it more accessible to people.
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as you know, I've written a couple of books on my areas of in depth knowledge.
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So, one of the things I've been experimenting with is, taking some of that
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knowledge and offering it in a digital format, one, experiment I believe I shared
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with you was A contest and promotion tool, which asked a number of questions
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and then gave you kind of a checklist.
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of the legal questions you might ask before going forward with that.
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and I've asked, actually used a tool, that a lot of, attorneys and,
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well, it is a, Interview construction tool targeted to the legal space.
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It's called Doc.
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Assemble.
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It's actually open source and spent a little bit of time.
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tinkering around with that, is a long way to answer your question.
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I was familiar with automation and artificial intelligence
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through that process.
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But when chat GPT came to my attention, that may have been around the same time
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as it came to everyone else's attention.
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I kept hearing about it and
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right.
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Right.
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I guess I'd heard about it, but it was just noise to me kind
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of like block train or crypto.
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don't need to know that.
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I don't want to know it, until finally I could no longer
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ignore it, which was during.
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Yeah.
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And MCLE where I needed to get some credits, so I wasn't delinquent.
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And so I'm listening to this one about AI and it's describing, they were talking
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about chat, GBD in particular, and they're describing what you could do.
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And they're having these samples and I'm like, what it can do.
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What?
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And so while I'm still in there, you know, it was just online.
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I'm silly.
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God forbid I go someplace in person.
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and then I'm on my computer, like.
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Doing stuff with it.
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I'm like, Oh my God, this is bad.
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And that was, well, it was February, 2023 and that was my initiation.
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So what the last year has been, actually a fire hose of information
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and changes in that time.
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so I think chat GPT, it's the AOL of our times.
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It's this technology that's been around for a while, but we finally have this
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application that has made it a much more, accessible and user friendly
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for a much wider group of people.
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Yeah.
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I mean, I guess, you know, when you think artificial intelligence has
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been a while, I mean, obviously we've always had autocorrect and things
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like that, or, all those things were artificial intelligence, right?
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things like Alexa and Siri, right?
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I mean, those Versions of it.
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We just didn't think of it the way that we think of AI now.
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Exactly.
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It's been around for a while.
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We just finally got a killer app in chat GPT.
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Right.
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Awesome.
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So a lot of questions that I get are around, where's this data coming from?
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what is the black box of, generative AI in particular we're talking about.
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and what do I need to worry about?
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are they taking my prompts and what are they doing with it?
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client who is, utilizing signing an agreement to utilize the contract
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review a I like, what are the issues regarding using 1 of those?
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So everybody has questions about, What happens when I use AI and
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what do I need to worry about?
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And where does that, data come from and what is my exposure?
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So I would just like to start from the top.
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I think most of the audience is familiar, AI, but let's talk
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about what training data is.
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Like does it get its information from?
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How does it get in there?
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And, yeah, just start there with a general.
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Yeah.
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when we talk about a I models and some of the copyright and licensing
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issues, there are kind of 2 categories.
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category is the input.
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And the 2nd category is the output.
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When we're talking about generative, a, I, So when you mention training
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material, you're talking about the first category of input.
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And there has been a lot of controversy over whether or not, the training
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material that is required to train these models, can be used without permission.
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Because what the foundation models do, when I say foundation models, I mean
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that Maybe eight or 10 models are around that, literally have millions of pieces
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of content that they take into their kind of black box and, analyze it so that it
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can be a general use large language model.
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many of these models do is they source that data by getting data from
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anywhere that they can, including, scraping the Internet for millions
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and millions of pieces of data.
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So, there's been, as I said, a lot of controversy around
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whether or not permission is required for them to do that.
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and many of these models are relying on now is an argument that, their use of that
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material, as training material qualifies as a fair use to the Copyright Act.
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I believe there number of, Areas a number of factors that will gradually
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push these AI foundation models towards licensing that material.
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1 of them is, is that there have been a number of lawsuits that have been filed
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against them, charging them with copyright infringement and other related infractions
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over their use of this material.
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and.
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A lot of those suits while all of those suits are still pending and they may
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take a very long time to play out.
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I think we're going to see progress towards more licensing prior to that.
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And that's because people are very anxious.
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to, use generative A.
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I.
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And, before they use that, though, they want some comfort level that
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their use that material is not going to subject them to any type of a
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copyright infringement or other claim.
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So in order to make their customers, comfortable, With the fact that they
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can use this material without taking on any legal liability, we are seeing more
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and more of these AI companies gradually move towards licensing the content.
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want to follow up on that before I'm going to step back just a second,
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because you said large language models, and then we have machine
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learning and we have generative AI.
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Are those synonyms?
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Or are they all different elements?
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Transcribed Okay,
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not the expert here, but I'll share with you my understanding.
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So, the large language models, they are, the general models that can process.
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the generated output, so that means they take all of the input,
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all of that training material, and they basically analyze it to see
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what the relationship of each data point is to this other data point.
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So, when you ask it to produce something, it is, estimating or.
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Putting forth, it's analysis of what word should come next or what
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should come next in this particular graph, which is why it needs so much
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training material from which to learn.
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Got it.
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Okay.
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Now, you mentioned going back to where it's going towards licensing because users
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of AI, I want to know that they're not going to get sued they use the output.
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what does that mean for all of the current data that has been scraped
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from the Internet and all these places?
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previously, I mean, isn't the data sets.
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and our use of AI as is almost like too big to fail.
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what could happen with these lawsuits that are happening right now, if there
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are billions of pieces of, let's say pirated information and say, the chat
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GBT, open AI is training data set.
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what could the possible remedy be if they lose?
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Okay, so I do want to separate this into 2 categories again, because
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when we talk about infringement, there are 2 separate questions.
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The 1st question being whether or not just the process of.
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Of the, a I companies, taking in data as training material and using
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it to train their model, whether or not that's copyright infringement.
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That's one question.
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And then the second question is if you as a user of these models,
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if you produce content and.
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Use it to produce generated content.
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Is there any legal liability for you?
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Now, there are circumstances that could be imagined where, it's
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possible for the, models, training data to be considered a fair use.
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But maybe the way you've used it in creating output, is infringing
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or violating in some way.
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I'm not saying that scenario has actually come up or may come up
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often, but 1 can imagine a set of circumstances where that might be true.
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So, back to your original question, where is all this going?
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What are the potential remedies?
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well, 1 remedy with respect to these lawsuits is that they will settle with
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a lot of these companies because the companies that have sued them have been
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the largest companies with the most resources and very large organizations.
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Like the author's guild, so they may settle, come to some agreement
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on what a settlement fee should be.
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And it's also possible that part of their settlement might be a
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licensing agreement going forward.
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that resolves matters for, the large organizations that have sued and.
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The large private companies, if it's an organization or association, representing
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much smaller players, it remains to be seen how much might flow to them
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as part of any judicial settlement.
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It may be that as opposed to a private settlement, we might get
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some sort of a judicial settlement.
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I think.
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It's perhaps less likely, but it might be one of the outcomes and that
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might be a settlement like something that was proposed in Google Books.
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Now, the Google Books lawsuit, if anyone remembers his lawsuit from 2015.
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This is the lawsuit that came out of Google Books starting its program
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where it digitized millions of books and use them and still uses
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them today to give a snippet of books in response to our search.
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So that is one of the cases on which a lot of these AI model companies
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rely when they argue that their use of the training material is a fair use.
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For those who remember, the Google Books case initially, tried to resolve
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itself, via a judicial settlement agreement that would have permitted
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the snippets of those books and allowed the digitization, but that judicial
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settlement, or the private settlement that was proposed, went to court.
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Very much beyond just providing snippets, which is, one of the reasons
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that it was ultimately, not approved by the court and kept going on and
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ultimately said, okay, well, we're stripping out all this information.
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you try to do in the settlement.
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But, as consolation, we decided Google books that your use is a fair use.
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So, it might be that some of the parties, try to move in that direction of some
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type of a settlement that encompasses both small and larger players.
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some of the other types of resolutions that have been thrown
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out include kind of a collective.
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that would be parallel to, the way we collect, public performance
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royalties in the music industry.
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So, for example, when a song is performed on the radio, all songwriters,
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receive some income from their songs they've written being played.
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Well.
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the radio station is not going out and I'm entering into license agreements
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with the millions of songwriters.
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They have collected is in the case of music, as cap and BMI and couple others.
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that, have these collective agreements where they issue blanket licenses.
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So something like that has been proposed, potentially for,
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the training material space.
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So that brings in both, rights owners with very large catalogs and rights
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owners with very small catalogs.
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The copyright office had a comment period where it asked a bunch of industry
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players what they thought of this and most of the people who commented were
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very much in favor with, direct licensing, or perhaps even aggregated licensing
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now that may be in part because that's where, larger companies are going to
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get kind of the premium licensing.
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Um, because the direct licenses we've seen, today have been between, you
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AI model companies and very large organizations for millions of dollars.
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just like the, what we're talking about in the collective licensing, example,
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those very large companies are not going to enter into license agreements
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with, millions of small players.
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there'll be some balancing where they too can participate.
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1 potential example of how this might be alleviated is through aggregators.
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So, one aggregator we have right now is the Copyright Clearance Center,
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which is aggregating, scientific papers for use in training material, and
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that allows, smaller rights owners to participate in, having their material
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and being paid for their material to be used as training material,
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if that's what they choose to do.
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An example in, this space I've seen, come forward as a startup is called Dappier,
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and that is a startup that is, dedicated to getting those smaller, rights owners,
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giving them the opportunity to participate in being a part of training material.
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and making that training material more accessible to both the large, AI models,
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and, you know, the smaller, AI companies that might have fewer resources and not
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be as able to, compete when, you know, license, you know, is Agreements are going
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for millions and millions of dollars.
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Yeah.
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Yeah.
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I mean, it sounds like this would all have to be perspective.
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I mean, if, the AI companies have been scraping the Internet for we
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don't know how long and is it even able to distinguish 1 piece of data?
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In the data set from another, I don't know, like, how would you compensate all
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the information that's already in there.
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and in order to, parcel out payments, whatever fraction of a penny that, I might
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get for, something, and going forward.
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If you are a small content creator, kind of your everyday content creator,
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like the audience here, it would then be on you to make sure that
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your content is registered somewhere.
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So you'd be part of some aggregator that has a license
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who is getting paid by the AI, AI
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Okay.
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So several issues in that question.
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okay.
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Let's go with, That first part where you talk about kind of the provenance,
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what was the source of the data?
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Is it even traceable?
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And this is one of the pain points.
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And this is also where that analysis about whether your output subjects
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you to any type of liability.
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so back up for a second.
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if you are any type of content creator, and you are trying to determine
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whether or not the content you've created, is violating any rights,
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you need to know its source, right?
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So, For the output that they have, if that provenance is not available,
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you using the generative AI, you can't even do that analysis.
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So that's part of the pressure on the AI model companies.
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in not just waiting for these lawsuits to play out, but making their
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potential customers comfortable that you can use our AI models and it can
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produce output that you can then use.
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And so part of having to do that is knowing the provenance.
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Now, the extent to which they currently do that.
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I don't know.
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I model companies have often.
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Been quite opaque and not very transparent about how the sausage is being made.
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on the outside, though, like again as another example of where the industry
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is going, there has cropped up another, kind of startup in this space called
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barely trained, which is offering certification for AI model companies.
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00:20:44
that have, produced their models relying solely on an authorized data set.
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00:20:52
And then, you know, theory is, you are, a company that wants to leverage AI,
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00:20:58
you can get more comfort in knowing that, you're relying on AI model, an
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00:21:03
AI company that is fairly trained.
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00:21:04
And the last time I checked, there were only a few dozen companies that had
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00:21:08
that certification, but, that may grow.
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00:21:11
So, maybe enterprise users would go for the fairly trained type,
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00:21:15
because they're much more concerned, frankly, than most everyday users
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00:21:20
about the quality of that output.
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00:21:22
it seems like if they're using it, to create public facing
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00:21:26
materials, they would want that fairly trained data set behind it.
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00:21:31
they did, they also give reps and warranties when you go through them
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00:21:33
regarding the quality of the output.
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00:21:35
Do they give representations and warranties fairly trained provided
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00:21:39
anyone who well, fairly trained or someone who has licensed their
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00:21:44
data from fairly trained would they then in their terms of use have.
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00:21:49
Represent fairly,
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00:21:51
trained doesn't license data.
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00:21:53
Fairly trained is a certification program.
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00:21:56
So if an AI company, wants this certification to show everyone, that.
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00:22:04
They have relied on an authorized data set, then this is a
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00:22:07
certification that they can apply for.
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00:22:10
Got it.
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00:22:10
Okay.
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00:22:11
because I believe that there are some platforms that do provide
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00:22:15
indemnification, although they have a bunch of provisos, where's that going?
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00:22:19
So that users feel more.
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00:22:21
Comfort there, right?
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00:22:22
So, I mean, I think that's part of their responding to, this pain point
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00:22:27
of needing to make their customers more comfortable with using their product.
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00:22:32
they are, providing certain indemnifications, it remains to be seen,
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00:22:37
how effective those indemnifications would be if a customer were actually sued.
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00:22:44
And as you mentioned, they do have, a lot of exclusions, personally, I think that is
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00:22:51
just sort of an intermediate stop gap and they are going to be pushed more towards,
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00:22:57
More licensing of their data sets.
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00:23:01
and I would say, while we wait for this to play out, I mean, as you
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00:23:05
know, this lawsuit could take and probably will take a very long time.
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00:23:09
the Google books case, for example, on which the AI companies are
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00:23:12
relying to 10 years before finally reaching, that conclusion that, Google
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00:23:18
books digitization was a fair use.
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00:23:21
So I would say in the interim, AI companies, and those.
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00:23:26
producing AI models should look more to, using, authorized data sets or
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00:23:33
construction of their models and authorized data sets with a traceable
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00:23:38
provenance so that, their customers, when using the, output or wanting
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00:23:44
to put the output into use, can.
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00:23:47
Know what the source is and do that analysis of is this
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00:23:51
violating any copyright?
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00:23:52
Is this violating any right of publicity or trademark or anything else?
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00:23:57
I would say for the companies that want to leverage a I, when you're looking for
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00:24:01
partners, you do want to look at partners who are using authorized data sets.
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00:24:08
Right now, what I see is that a lot of companies, brands.
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00:24:13
companies in the film and television industry that are actually leveraging AI
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00:24:19
and it is being leveraged, but they're using it for a first draft or a proof
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00:24:26
of concept for things that are iterative and you'll need to be turned around
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00:24:31
very quickly, but they're not using it.
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00:24:34
As part of the final consumer facing output, just due to those copyright
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00:24:42
reasons, both the reasons we just discussed, fear of having any type
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00:24:47
of legal liability, but also, because there are limitations on the degree to
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00:24:53
which you can protect, output that's generated by, artificial intelligence.
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00:24:59
Right, so when they have a.
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00:25:01
Authorized data set.
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00:25:03
And does the output come with footnotes with What does that look like?
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00:25:07
Do you know?
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00:25:07
Have you seen, what that looks like
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00:25:09
tell us what the sources are with it?
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00:25:12
Like, does it identify?
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00:25:13
Yeah.
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00:25:13
Oh, oh, oh, I see.
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00:25:15
When is it authorized?
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00:25:15
It is right.
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00:25:16
To my knowledge, it is not coming with anything.
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00:25:21
And you're talking about the fairly trained component, right?
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00:25:23
Yeah, is not coming with anything.
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00:25:26
but that does need to be a path toward which we're traveling.
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00:25:31
And there has been like a lot of conversation about that in this space that
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00:25:36
it needs to be, you marked, needs to be traced in terms of, what was the source?
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00:25:42
What did you rely on to do that?
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00:25:46
Yeah.
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00:25:46
As far as, the magic that happens inside of generative AI
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00:25:50
platform, do we know what that is?
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00:25:53
Or is that kind of the trade secrets of each companies?
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00:25:56
Or is there general technology that Makes the magic happen?
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00:26:00
I am not the expert on the technology inside of the AI models.
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00:26:06
I can share what I know.
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00:26:08
In part, it does depend on the approach that they've used, whether it's supervised
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00:26:14
learning or unsupervised learning.
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00:26:16
Which to make it very simple depends on how much you assisted the machine,
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00:26:21
like, did you mark things and tell them, this is a dog and this is a cat
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00:26:26
or did you just give them like kind of millions of pictures and kind of let
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00:26:29
them figure it out when you let them figure it out when it's unsupervised,
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00:26:35
it is more of a black box in terms of how they got to that answer,
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00:26:40
which brings up all sorts of other.
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00:26:43
societal issue, right?
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00:26:45
I think it's a time to play it about
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00:26:47
a, uh, interesting.
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00:26:48
can we wrap up with some best practices just for your everyday kind of chat, GBT,
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00:26:53
Janet, what is the Google on Genesis?
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00:26:55
What does it, user like when they're using it, for this audience, the expertise
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00:26:59
based business, maybe they're using it to create first drafts or to help them with
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00:27:03
social media posts or something like that, like just some general best practices.
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00:27:08
Sure, you want to be, circumspect about any, confidential or proprietary
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00:27:15
information you include in a prompt, may want to anonymize it.
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00:27:21
you need to keep in mind that, whatever output you get from, the
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00:27:26
AI model, may not be eligible for copyright protection if this is, um.
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00:27:31
something, material or output that you are passing on to a client or to a
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00:27:38
customer, you may need to disclose that use, and you have to make sure that,
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00:27:45
you're using the output Depending on the extent to which you're using it, are
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00:27:51
you using it just for, a little bit of assistance in, modifying a few sentences?
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00:27:57
Or are you actually producing images with it or producing an entire report with it?
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00:28:02
You gonna want to make sure that you're procedures for like using generative
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00:28:07
AI are consistent with the, contract that you have with your customer.
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00:28:12
If you want to know whether or not, your material, your prompts are being
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00:28:17
incorporated into the training data and being used to further train that AI model,
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00:28:25
take a look at the terms and conditions.
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00:28:28
to give you an example for chat, if you're using the free model,
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00:28:34
and it is, recording your history.
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00:28:36
Of your prompts, then, the prompts that you put in.
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00:28:40
There are subject to being included as part of future training data.
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00:28:45
Yeah.
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00:28:46
So, if it along the left hand side there, you have scroll
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00:28:49
through and see all your graphs.
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00:28:51
I have.
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00:28:51
that means it is going into the training data.
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00:28:54
That is excellent.
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00:28:55
can't say with certainty that it is going into the training data.
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00:28:58
But I would say, it is susceptible to being used.
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00:29:02
It's like they have not provided you, CHAT2P has not provided
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00:29:06
you any representation that they will not use it for training.
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00:29:09
Right.
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00:29:10
Very good.
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00:29:10
Thank you for making that distinction.
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00:29:12
thank you for this.
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00:29:13
this podcast is to help create a society that, and an economy
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00:29:18
that works for more of us.
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00:29:20
So I love to ask my guests, if there is an organization or a person who is doing the
Speaker:
00:29:26
good and hard work to help make an economy that works for more of us, is there
Speaker:
00:29:31
one that you'd like to share with us?
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00:29:32
Sure, I really like organizations whose mission it is to
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00:29:37
bridge the digital divide.
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00:29:39
And one of my favorite is girls who code that has as part of its
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00:29:44
mission, introducing more women.
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00:29:47
into the technology field, and that's very apropos to our conversation
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00:29:51
today, because as part of making AI, you beneficial for all humankind, we
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00:29:58
really do need, a diverse perspective.
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00:30:02
Yeah, I mean, we know that just when we talk about the Trina dating sets, like
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00:30:06
what data is going in there, obviously.
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00:30:08
what the output is only as diverse as the input, right.
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00:30:11
And how it's being trained.
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00:30:13
And I know that has come up in a number of, controversial ways as well, but
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00:30:17
whether something's leaning this way or that way, but we definitely want to make
Speaker:
00:30:20
sure everyone has a voice in the future.
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00:30:23
Thank you for that one.
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00:30:24
And we will put that in the show notes along with how people can reach you.
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00:30:29
where do you hang out, Joy?
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00:30:30
And how can people get in touch with you to find out more?
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00:30:32
Sure, so I'm always, , happy to, chat with, people doing innovative
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00:30:38
things with technology, especially in the digital technology, online and
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00:30:43
entertainment space, so they can find me through my website, which is www.
Speaker:
00:30:47
joybutler.
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00:30:49
com.
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00:30:49
And I'm awesome.
Speaker:
00:30:50
So, on LinkedIn, I have Joy Butler.
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00:30:53
Awesome.
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00:30:53
Well, thank you so much.
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00:30:55
And, yes, everyone, please, follow Joy and, let us know if you have
Speaker:
00:30:59
any other questions about AI.
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00:31:01
I know it's constantly evolving.
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00:31:03
There's always going to be something new and we can continue
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00:31:06
this conversation in the future.
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00:31:08
Thanks again, Joy.
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00:31:09
Thank you.