The big risk behind the AI investment boom

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The VC market may be making its biggest binary bet ever, without quite realizing it.

Why it matters:Many of those models are being built, in part, on data that is under U.S. copyright protection. Several of the copyright holders, including major music companies,If some of these lawsuits are successful, they could eviscerate the cost structures of companies that have raised billions of dollars.

"This copying to storage for use in AI training is a likely clear-cut case of infringement, and the courts will put a stop to it," Jason Peterson, CEO of IP right management and claims firm GoDigital Media Group, told AxiosAxios reached out to several VCs who are invested in some of the top LLM developers, and none sounded even the least bit concerned. Then again, no one wanted to go on the record, instead preferring to reply on background.

Another VC added: "The models rarely regurgitate the exact thing that they trained on. They train on a lot of different things, and then they generate based on probabilistic models. Arguably, this is exactly what humans do. So, then would you could sue every creative work that a human creates as well.

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