Startup using blockchain to prevent copyright theft by AI is valued over $2 billion after fresh funding
Generative AI models require huge amounts of training data to enable their systems to produce advanced outputs. But the data that goes into them is often from sources where copyright restrictions are in place.
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San-Francisco-based startup Story said Wednesday that it raised $80 million of funding for a blockchain designed to prevent artificial intelligence makers like OpenAI from taking creators’ intellectual property without permission.
The round values the two-year-old company at $2.25 billion, sources familiar with the matter told CNBC. The sources preferred not to be named as the information has not been made public.
Story said that it raised the funds in a Series B round — typically the third major round of funding in a private startup’s growth journey after seed and Series A — led by Andreessen Horowitz, which is also known as a16z.
Crypto-focused venture capital firm Polychain and Brevan Howard, the investment fund of British billionaire hedge fund manager Alan Howard, also invested.
Building an ‘IP legoland’
A blockchain is a distributed database that maintains an immutable record of activity. It is the technology that underpins cryptocurrencies, such as bitcoin and ether.
Story acts as a blockchain network that allows creators to prove they made a piece of content and are the intellectual property owners by storing their IP on the platform.
The firm’s tech works to protect individuals and entities’ IP by embedding terms associated with it, such as licensing fees and royalty-sharing arrangements, into smart contracts.
Smart contracts are digital contracts stored on a blockchain that automatically execute once a certain set of terms are met.
This makes copyright holders’ IP “programmable,” SY Lee, Story’s co-founder and CEO, explained to CNBC, as it sets up rules for how their content can be used and the price to pay for reproducing or remixing their works.
The benefit of this, Lee said, is that it effectively cuts out the middlemen typically involved in disputes over copyright theft in the media landscape.
“Now it’s turned from IP into IP Lego,” Lee told CNBC. “Now, you don’t need to go through lawyers. You don’t need to go through the agents. You don’t need to do this very lengthy business development negotiation. You just embed your licensing, royalty-sharing terms into small contracts.”
Story makes money by charging a network fee for any action that takes place on its network.
One example of a firm using Story is Ablo, an AI tool that allows users to make their own tailored items of fashion using designs from household brands including French designer clothing firm Balmain and Italian luxury fashion house Dolce and Gabbana.
Brands are compensated for their use of fashion designers’ IP through various respective licensing and revenue-sharing agreements.
Fighting AI copyright theft
Story is now trying to tackle a timely problem with its tech — theft of copyrighted media on the internet by powerful generative AI models like OpenAI’s ChatGPT.
These models, which power many AI chatbots that are increasingly being used as an alternative to search, require huge amounts of training data to enable their systems to produce advanced and informative answers to user queries.
But the data that goes into fueling these AI models is often from sources where there’s copyright restrictions in place.
The New York Times last year hit Microsoft and OpenAI with a copyright lawsuit seeking damages over abuse of the newspaper’s intellectual property.
In the suit, the Times included several examples of instances where GPT-4 produced altered versions of material originally published by the newspaper.
Big tech companies like Microsoft, which has invested $13 billion into OpenAI and is reportedly entitled to a 49% stake in the firm, are “essentially stealing your IP for training purposes and actually capturing all the upside,” Lee said.
In a motion to dismiss part of the Times’ suit in March, Microsoft said that such claims were “unsubstantiated,” and that the lawsuit presented a false narrative of “doomsday futurology.”
Content used to train these models, Microsoft’s lawyers argued, “does not supplant the market for the works, it teaches the models language.”
Microsoft was not immediately available for comment when contacted by CNBC about Lee’s comments.
Good IP is needed to train such AI models, Story’s Lee told CNBC, but he added that AI firms stand to lose long-term if they don’t adequately compensate the publishers and creators they’re sourcing those vast troves of IP data from.
“You need great IP going into AI to have a sustainable growth in AI. Without great human-created data, AI models are not going to be able to train themselves and improve themselves,” Lee said.
Not many startups are designing tech designed specifically to combat IP theft by AI.
One project from the University of Chicago, called Glaze, offers a free app for artists to combat the theft of their IP by AI tools with technology that makes subtle changes to artworks designed to disrupt AI models’ ability to read data on the works of art and mimic the style of the artwork and its artist.
Story, which was founded in 2022, plans to use the fresh cash to build out its IP network infrastructure and onboard more developer partners. The company already has over 200 developers using its platform to enable content creation using programmable IP.
Lee added: “There’s a huge, amazing digital renaissance making everyone a creator or a studio, but at the same time, if no one’s actually compensating and actually getting the IP monetized right, it’s a suicidal action for AI in the long term.”
Samuel Boivin | Nurphoto | Getty Images
TikTok CEO Shou Zi Chew told employees on Thursday that the company’s U.S. operations will be housed in a new joint venture.
The entity is named TikTok USDS Joint Venture LLC, according to a memo sent by Chew and obtained by CNBC. As part of the joint venture, Chew said the company has signed agreements with the three managing investors: Oracle, Silver Lake, and Abu Dhabi-based MGX. He said that the deal’s “closing date” is Jan. 22.
Under a national security law, which the Supreme Court upheld in January, China-based ByteDance was required to divest TikTok’s U.S. operations or face an effective ban in the country. In September, President Donald Trump signed an executive order approving a proposed deal that would keep TikTok operational in the U.S. by meeting the requirements of a law originally signed by former President Joe Biden.
Chew noted that the new TikTok joint venture would be “majority owned by American investors, governed by a new seven-member majority-American board of directors, and subject to terms that protect Americans’ data and U.S. national security.”
The U.S. joint venture will be 50% held by a consortium of new investors, including Oracle, Silver Lake and MGX with 15% each. Just over 30% will be held by affiliates of certain existing investors of ByteDance, and 19.9% will be retained by ByteDance, the memo said.
The TikTok chief said the entity will be responsible for protecting U.S. data, ensuring the security of its prized algorithm, content moderation and “software assurance.” He added that the joint venture will “have the exclusive right and authority to provide assurances that content, software, and data for American users is secure.”
In addition to being an investor, Oracle will serve as the “trusted security partner” in charge of auditing and validating that it complies with “agreed upon National Security Terms,” the memo said. Sensitive U.S. data will be stored in Oracle’s U.S.-based cloud computing data centers, Chew wrote.
The new TikTok entity will also be tasked with retraining the video app’s core content recommendation algorithm “on U.S. user data to ensure the content feed is free from outside manipulation,” the memo said.
Chew noted that TikTok global U.S. entities “will manage global product interoperability and certain commercial activities, including e-commerce, advertising, and marketing.”
Under Trump’s executive order in September, the attorney general was blocked from enforcing the national security law for a 120-day period in order to “permit the contemplated divestiture to be completed,” allowing the deal to finalize by Jan 23.
WATCH: TikTok signs deal for sale of U.S. unit to joint venture
The VC arms of Google and Nvidia have invested in Swedish vibe coding startup Lovable’s $330 million Series B at a $6.6 billion valuation, the company announced on Thursday.
The news confirms an earlier story from CNBC, which reported on Tuesday that Lovable had raised at that valuation, trebling its valuation from its previous round in July, and that the investors included U.S. VC firms Accel and Khosla Ventures.
CapitalG, one of Google’s VC divisions, and Menlo Ventures led the round. Alongside Accel and Khosla, Nvidia venture arm NVentures, actor Gwyneth Paltrow’s VC firm Kinship Ventures, Salesforce Ventures, Databricks Ventures, Atlassian Ventures, T.Capital, Hubspot Ventures, DST Global, EQT Global, Creandum and Evantic also participated.
The fresh funds take Lovable’s total raised in 2025 to over $500 million.
“Lovable has done something rare: built a product that enterprises and founders both love,” said Laela Sturdy, managing partner at CapitalG in a statement accompanying the announcement.
“The demand we’re seeing from Fortune 500 companies signals a fundamental shift in how software gets built.”
Lovable’s platform uses AI models from providers like OpenAI and Anthropic to help users build apps and websites using text prompts, without technical knowledge of coding.
The startup reported $200 million in annual recurring revenue (ARR) in November, just under a year after achieving $1 million in ARR for the first time. It was founded in 2023 by Anton Osika and Fabian Hedin.
Vibe coding startups have seen big interest from VCs in recent times, as investors bet on their promise of drastically reducing the time it takes to create software and apps.
In the U.S., Anysphere, which created coding tool Cursor, raised $2.3 billion at a $29.3 billion valuation in November. In September, Replit hit a $3 billion price tag after picking up $250 million and Vercel closed a $300 million round at a $9.3 billion valuation.
The Micron logo is seen displayed at the 8th China International Import Expo.
Sheldon Cooper | Lightrocket | Getty Images
Micron Technology‘s stock jumped 15% after the company signaled robust demand for its memory chips and blew away fiscal first-quarter estimates.
During an earnings call with analysts, Micron, which makes memory storage used for computers and artificial intelligence servers, said data center needs have fueled greater demand for its products.
Micron said it expects the total addressable market for high-bandwidth memory to hit $100 billion by 2028, growing at a 40% compounded annual growth rate. Management also upped its capital expenditures guidance to $20 billion from $18 billion.
“We are more than sold out,” said business chief Sumit Sadana. “We have a significant amount of unmet demand in our models and this is just consistent with an environment where the demand is substantially higher than supply for the foreseeable future.
Micron topped Wall Street estimates for the fiscal first quarter and issued blowout guidance.
The company reported adjusted earnings of $4.78 per share on $13.64 billion in revenue, surpassing LSEG estimates for earnings of $3.95 per share and $12.84 billion in sales.
Revenues in the current quarter are expected to hit about $18.70 billion, blowing past the $14.20 billion expected by LSEG. Adjusted earnings are forecast to reach $8.42, versus expectations of $4.78 per share.
JPMorgan upped its price target on the stock following the results, citing the favorable pricing setup, while Bank of America upgraded shares to a buy rating.
Morgan Stanley called the results the best revenue and net income upside in the “history of the U.S. semis industry” outside of Nvidia.
“If AI keeps growing as we expect, we believe that the next 12 months are going to have broader coat tails to the AI trade than just the processor names and memory would be the biggest beneficiary,” analysts wrote.
WATCH: Micron shares spike on better-than-expected quarterly results
Micron year-to-date stock chart.
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