"We’re focused on solving a real problem that impacts the creative industry, not just creating another technical tweak," PIP Labs CEO SY Lee says.

Updated Aug 21, 2024, 1:21 p.m. Published Aug 21, 2024, 12:00 p.m.

In a July 2023 op-ed, actor Joseph Gordon-Levitt argued that if artificial intelligence uses your work, it should pay you. That's the basic premise behind the intellectual property-focused blockchain Story Protocol, and it's quickly becoming a well-funded investment theme.

On Wednesday, PIP Labs, the initial core contributor behind Story, announced an $80 million Series B, led by the venture capital firm Andreessen Horowitz (a16z).

AI companies have hoovered up so much of the web's creative content to train their large language models (LLMs), which has resulted in lawsuits between creatives and tech giants like OpenAI. The New York Times is battling OpenAI over allegations of copyright infringement, and YouTubers are doing the same with Nvidia (NVDA), which is alleged to have unjustly enriched itself by building a video model using scraped content. At the same time, News Corp, the owner of the Wall Street Journal has struck a deal with OpenAI to license its content for LLM training in a deal with over $250 million.

"Without great original IP, the AI models don’t develop," PIP Labs co-founder and CEO SY Lee said in an interview, emphasizing that AI is "taking, stealing all your data without your consent," and benefiting from it without sharing the rewards with the original creators.

Story Protocol works by converting intellectual property into "IP Legos" – modular and programmable assets that can be licensed, managed and monetized through smart contracts on a blockchain. Lee explained that Story allows creators to assert control over their data by embedding licensing and royalty terms directly into their intellectual property.

"With Story, creators can embed licensing terms directly into their IP, ensuring that anyone who uses it must adhere to their rules," Lee said. "You’re declaring your sovereignty around the data. This is about saying, ‘Don’t mess with my data. This is my IP.'"

The debate about what AI companies owe creatives is of utmost importance to the entertainment industry, according to Lee. "In the past, Google was kind enough to drive some traffic to your content, and that still killed many local newspapers," he said in a press release announcing the raise. "The current state of AI completely destroys the incentive to create original IP for all of us."

The project represents another use case for blockchain beyond yet another DeFi chain that draws from the same pool of users and regurgitates the same liquidity with only minor technical improvements.

"It's all just infrastructure masturbation – another minor tweak, another DeFi chain, another DeFi app," he said. "Everyone’s doing the same thing, chasing esoteric technical improvements."

Story's mainnet launch is expected later this year, with more details expected to be shared during the Korea Blockchain Week in Seoul in September.