Thursday, News Corp. shares went up after the media giant signed a content deal with OpenAI, a leader in artificial intelligence.
Because of the deal with OpenAI, the ChatGPT provider can access both new and old content from The Wall Street Journal, The New York Post, and The Times. The pact also includes MarketWatch news and information. MarketWatch is the source of this report.
Some anonymous sources told the Wall Street Journal that the deal could be worth $250 million in cash and credits for using OpenAI technology. The exact amounts were not made public.
Reddit and other social media sites, as well as the Financial Times and another AI company backed by Microsoft, have made deals with the company to provide content.
In premarket trade, News Corp. shares NWSA, 2.02% NWS, 1.95% went up 7%.
Researchers at JPMorgan said there were pros and cons to media companies making deals with OpenAI and other providers before the deal. Analysts said that investors were afraid that if they gave their deals to AI platforms, those platforms could take the place of destination news sites completely.
Analysts said licensing deals are likely to have ways out if advertising or subscription revenue goes down, but they are also likely to be good for business in the long run.
