Quick take:
- The Series B round also attracted participation from Polychain alongside notable angel investors.
- Story Protocol markets itself as “the world’s IP blockchain” seeking to tokenise the multi-trillion dollar intellectual property asset class.
- The company says its IP blockchain is particularly crucial in taking AI to the next level and protecting the creator economy from exploitation by big tech and LLMs.
Story Protocol, the Web3 company building “the world’s IP blockchain” has raised $80 million in a Series B round led by Andreessen Horowitz’s digital asset investment arm “A16z Crypto”. The fundraising also attracted participation from Polychain Capital alongside notable angel investors like Stability AI’s VP & Board Member Scott Trowbridge, K11 Founder Adrian Cheng, and digital art collector Cozomo de’ Medici.
The Series B round brings the total raised by Story Protocol to date to $140 million according to a press release shared with NFTgators. The company previously raised $54 million in a funding round also led by A16z Crypto, with participation from Hashed, Samsung Next, Paris Hilton’s 11:11 Media, Dao5, Eva Lau’s Two Small Fish Ventures
Why it matters
Story Protocol wants to address one of the IP market’s biggest challenges as it expects it to be magnified by the growth of artificial intelligence. According to the announcement on Wednesday, the IP asset class has expanded over the years to move beyond Hollywood, Music, Literature and Billboard charts.
“IP means training data, AI models, memes, UGC videos, game assets, character traits, and so much more,” Story wrote. And given the rise of AI, the company expects intellectual property to become even more valuable, as it becomes a vital source of data and information for large language modules (LLMs).
Story’s Proof-of-Creativity protocol enables permissionless licensing and automated royalty payments, allowing for easy sharing of IP rights that unlock new revenue streams for creators.
The company says more than 200 teams with over 20 million addressable IPs, are already building on Story Protocol across various sectors, including IPFi, AI, and consumer markets. Some of the notable IPs include ‘Ablo’ by ‘Space Runners’, a digital creator backed by Polychain, Pantera and Accel, and Sekai, an AI storytelling platform that lets storytellers, artists, and fans co-create content with their IP.
The BIG picture
Story believes IP is the key to taking AI to the next level.
However, one major problem, which will come with the next level is IP theft. While AI empowers individuals to produce studio-quality IP easily, it also leads to IP theft, with the big tech and LLMs “sucking all the traffic” and profiting from it.
Story’s IP-centric layer-1 blockchain wants to tokenise intellectual property, making programmable IP in the era of AI.
The platform allows creators to declare the sovereignty of their IP and define usage parameters around their IP, thus bootstrapping a global network that turns fans into evangelists by remixing, selling, and distributing their IP.
Commenting on the announcement, S.Y Lee, co-founder and CEO of PIP Labs, the company behind Story Protocol said in a statement: “Big tech is stealing IP without consent and capturing all the profit. “First, they will gobble up your IP for their AI models without any compensation back. Then, they will hijack your future economics by sucking in all your potential traffic.”
According to Lee, the current state of AI completely destroys the incentive to create original IP for everyone, which could negatively affect the potential growth of the AI industry because no one will be willing to create original IP for AI to train upon.
Chris Dixon, founder and managing partner at A16z Crypto commented: “PIP Labs is building the necessary infrastructure for a new covenant in the AI age. Blockchains are perfectly suited for large-scale economic coordination, and Story’s platform ensures creators are compensated for their IP feeding the AI systems.”The AI market is forecasted to experience exponential growth over the next six years, reaching a valuation of more than $800 billion according to Statista, from about $184 billion in 2024.
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