AI lab TL;DR | Bertin Martens - The Economics of GenAI & Copyright

AI lab by information labs

🔍 In this TL;DR episode, Dr. Bertin Martens (Bruegel) discusses his working paper for the Brussels-based economic think tank on the economic arguments in favour of reducing copyright protection for generative AI inputs and outputs with the AI lab

* 9:44: Mr Martens intended to say "humans" instead of machines

📌 TL;DR Highlights

⏲️[00:00] Intro

⏲️[01:21] Q1-Balancing Innovation & Rights

Can the TDM opt-out right hinder innovation and economic growth, and what does it mean as regards the power of copyright holders vs. the potential societal benefits of generative AI?

⏲️[05:42] Q2-Licensing Impact on EU AI Competitiveness

What are the implications of licensing for genAI as regards competitiveness and quality of models and potential economic disadvantages for EU AI developers?

⏲️[09:11] Q3-GenAI's Impact on Creative Industries & Economy

Looking at outputs, how could genAI impact the creative industries and the broader economy, and what are your thoughts on how policy should evolve to reflect this?

⏲️[13:08] Wrap-up & Outro

💭 Q1-Balancing Innovation & Rights

🗣️ Copyright is an economic policy tool to stimulate investment in the production of artwork, and granting an exclusive copyright to an author avoids free writing on that artwork that would undermine the incentives to invest in its production.

🗣️ The optimal scope of copyright protection should balance, on the one hand, the welfare losses from this exclusive right given to an author against the welfare gains for society from stimulating investment in new and innovative productions.

🗣️ Both [copyright] overprotection and underprotection are bad. They will hamper innovation and reduce the economic efficiency of copyright.

🗣️ Generative AI opens up new and much cheaper possibilities to produce new and innovative artwork, and also has applications in a wide variety of other sectors outside the media sector and across the economy.

🗣️ The AI Act and the copyright law in Europe give priority to the private interest of copyright holders over the wider interest of society, and I don't think that's a good thing and we should change that.

💭 Q2-Licensing Impact on EU AI Competitiveness

🗣️ Generative AI models require vast amounts of training data to develop the model and to have a high-quality model. And already today we observe that the largest and most advanced models are running out of high-quality human edited text for model training.

🗣️ There is still sufficient supply of low-quality text data, for instance from social media, or from the transposition of voice data into text, or even from synthetic data. But all these low-quality sources reduce the quality of generative AI models.

🗣️ Imposing copyright licensing requirements on text data for model training will further shrink the available supply of text data for model training, and that will further reduce the quality of these models.

🗣️ Only the biggest tech companies can actually afford to negotiate the licensing fees and pay those fees to copyright holders, while smaller AI startups cannot afford this and are pushed out of the market.

🗣️ Pushing smaller AI startups out of the market is bad for competition, bad for innovation in the AI setting, and this is not the way we want to go.

💭 Q3-GenAI's Impact on Creative Industries & Economy

🗣️ Generally, copyright law worldwide grants copyright only to human authors of artwork, not to machine-produced artwork. With the arrival of generative AI models, however, that has changed, and for the first time in human history, a machine can produce artwork output.

🗣️ From an economic perspective, there is no need to grant copyright to AI-produced artwork because the marginal cost of producing generative AI output is actually very close to zero (...) and the risk of free riding, therefore, is very limited.

🗣️ The human labor that goes into designing a prompt set that you feed into a generative AI model is costly, and this prompt set is human artwork and could indeed receive copyright protection, just like any other human design, text or computer code.

📌 About Our Guest

🎙️ Dr. Bertin Martens | Senior fellow at Bruegel and non-resident research fellow at TILEC, Tilburg University

🌐 Bruegel | Economic Arguments in Favour of Reducing Copyright Protection for Generative AI Inputs and Outputs

https://www.bruegel.org/working-paper/economic-arguments-favour-reducing-copyright-protection-generative-ai-inputs-and

🌐 Bruegel

https://www.bruegel.org

🌐 Tilburg Law & Economics Centre (TILEC)

https://www.tilburguniversity.edu/research/institutes-and-research-groups/tilec

🌐 Dr. Bertin Martens

https://www.bruegel.org/people/bertin-martens

Dr. Bertin Martens is a Senior fellow at Bruegel and a non-resident research fellow at the Tilburg Law & Economics Centre (TILEC, Tilburg University). He has worked on digital economy issues as a senior economist at the European Commission's Joint Research Centre for over a decade until April 2022. Before that, he was deputy chief economist for trade policy at the EC.