ProRata.ai Raises $25M and Secures Major Media Deals for AI Chatbot

ProRata.ai, a generative AI startup, has announced securing $25 million in a Series A funding round and inking deals with several major news and music companies. These agreements will enable ProRata.ai to license content from these companies and share revenues generated from AI chatbot subscriptions.

Media Partnerships and Revenue Sharing

Prominent media partners such as Financial Times, Axel Springer, The Atlantic, Fortune, and Universal Music Group have agreed to license their content to ProRata.ai. The startup's business model aims to accurately attribute and share revenues with content owners on a per-user basis. This approach is hoped to establish a new AI economy that honors the value of premium content.

Funding and Leadership

ProRata.ai has raised $25 million from investors including Mayfield, Revolution Ventures, Prime Movers Lab, and Idealab Studio, a tech incubator founded by Bill Gross. Gross, known for creating the pay-per-click keyword advertising model, will serve as CEO. Mike Lang, a seasoned media executive, will support the startup as a board member and strategic advisor.

Statements from Media Executives

Nicholas Thompson, CEO of The Atlantic, expressed optimism about ProRata.ai’s model, stating, “We hope to see this approach to permissions, content controls, clear attribution, and fair value become the industry norm.” Sir Lucian Grainge, Chair and CEO of Universal Music Group, added, “ProRata.ai's objectives align with our vision of using revolutionary technology ethically and positively while rewarding human creativity.”

Upcoming AI Chatbot

ProRata.ai is developing a subscription-based AI chatbot, set to launch this fall. The company plans to evenly split subscription revenues with its content licensing partners. This model aims to attract a wide range of premium content owners, including publishers, authors, music labels, poets, and artists, to enhance the large language model powering the chatbot.

Notable Content Partners

In addition to the media companies, ProRata.ai has secured deals with individual authors such as Adam Grant, Seth Godin, and Tony Robbins. Half of the monthly subscription revenue from the chatbot will be shared among all media partners, based on the contributions of their content.

Patented Attribution Algorithm

ProRata.ai will use a patented algorithm to attribute each output from its chatbot to the relevant content owner's work. This algorithm considers factors such as the novelty of claims or facts presented. Content partners will be compensated based on the percentage of outputs attributed to their work.

Future Licensing and Market Potential

Bill Gross envisions licensing ProRata.ai's large language model to larger AI firms like OpenAI or Anthropic, which currently lack attribution systems for content contributions. This could enable publishers to demand fair value for their work from generative AI companies.

Broader Industry Impact

ProRata.ai's media partners, including The Atlantic, Fortune, Financial Times, Time, and Axel Springer, already have deals with AI companies like OpenAI and Perplexity. These non-exclusive arrangements allow publishers to collaborate with other AI firms, such as ProRata.ai.

Technology Licensing and Marketplaces

ProRata.ai could also license its attribution technology to third-party marketplaces like Tollbit, facilitating deals between AI companies and content publishers. The company's success will hinge on the accuracy and reliability of its large language model, which will be tested at scale via the consumer app.

Industry Movement

Bill Gross is confident that larger AI companies will prefer licensing ProRata.ai's model over developing their own. He believes this will be a more cost-effective and trusted solution for publishers. Gross emphasized, “We're building a movement that says generative AI is incredible, but it's flawed. It's powerful, but it's unfair, and we're working to make it fair.”