Jason Zhao I Onchain IP in the Age of AI I Story Protocol I Pragma San Francisco 2024

[Music] and for this next talk I'd like to bring on Jason from story to tell you about how we can put IP on chain so without further Ado please give Jason a big round of [Applause] applause all right all right hey everyone uh it's an honor to be here in San Francisco uh this is I think funnily enough the first time I've actually said anything about story and SF I spent a lot of time in in Korea and Brussels uh but it's great to be back here in my hometown and uh just share a little bit more about what story's doing um but really what's more important to me today is you know we're all here as developers in the ethereum and broadly in the blockchain ecosystem so uh not just talking about story today but really I want to focus on problems that I think blockchain is uniquely fit to solve and the one that I think about day-to-day and that we all think about as story is the big problem of Ip in the age of AI uh so I'll really try to focus a lot on that and then of course I'll share story solution and story's attempt at solving this problem but I think there are going to be many different solutions that blockchain can provide so before I talk more about story and about the IP problem I want to first talk about what intellectual property is I think this is a term that feels very opaque and at times boring or scary to people um and typically when we think of Ip people think about Billboard songs or the think about Hollywood films and that is certainly IP that's certainly contents but IP especially with AI is much broader than the simple things that you see on Hollywood or just the songs it's a much broader category that includes uh your name your image your likeness uh it include software in AI models themselves it can include your unique artistic style or your voice so IP is much broader than just entertainments uh and IP actually constitutes multi-trillion dollar asset class so it is something that touches every one of our lives and what story is trying to do is to create an internet scale IP Lego Land and I'll go a little bit more into what that means but the basic idea of story is that every single piece of content on the internet should be an IP Lego that can plug in across different applications with the terms of the IP owner set and enforced by software uh and the reason why this is important why we want to build this IP logand at all it's because IP as an asset class like I said before it's a multi- trillion dollar asset class but it's extremely siloed so every one of us interacts with IP we create content we produce content with AI you know all of us can create but at the end of the day unless you have a legal team of a 100 lawyers and you're doing deals with other Studios or other institutions that have you know 10 to 100 lawyers you actually don't get to access any of the upside of Ip and so if you think about IP as sort of a Marketplace for trust a Marketplace for media assets very very few people probably just the 0.1% % the top 0.1% actually get to participate in this market and the remaining 99% of us are are left out and this is because there's so much friction in order to leverage and access and license IP so this is what we're trying to solve and ultimately the solution is quite simple at a high level which is take every single piece of content that you see on the internet uh an image on Instagram or a video on Tik Tok right now it's just a static uh file right you don't know who created it it could be someone else's thing that they're reposting you don't know if you want to use it if you love this character that you're seeing you don't know how you can use it uh what you have to pay and even if you did you would again have to get a lawyer you'd have to go talk to this person physically and you'd have to strike a deal which is prohibitively expensive extremely high friction and extremely opaque so what sory is trying to do is embed all of this information all of this importance context into software so that every single piece of content on the internet has the information around who can license it how much what are the royalties and other important data uh right in the IP itself and so this is not just a technical solution we're not focused on just building software of course that's very important but an important part of our solution and I think an important part of solving a lot of problems that are sticky and and complex in the real world is to connect with traditional institutions and leverage those systems so we've actually spent almost as much time on the legal side building out a legal contract that Maps oneto one with our smart contracts so whenever creators or IP owners set the terms on their IP about royalties or about licensing that's actually being mapped in a real legal contract that backs the IP so this is something that creators can actually offramp from story and take to Disney or take to Hollywood and ultimately what this means is essentially a vision where every single piece of content on the internet has a QR code uh that developers that other creators and even AI models can essentially read through an API uh so that's a little bit about story but like I said I wanted to focus on the problem and the real reason why any of this matters at all why we're building this uh all of this at story started with a single question in that question is why aren't we living in a digital Renaissance if you think about it uh if you're an alien from ours and you come out to observe the technology the first couple things you'll notice number one is that everyone on Earth pretty much who has internet access can reach the entire globe and and we have distribution for free so from your seats now if you take a photo and it goes viral you post it on social media you can reach 10 million people in an hour for free so as a Creator you have free and global distribution second we now have this Advent of this new technology generative AI I'm sure we've all heard so much about it but you have models like Sora open AI Sora that allow anyone not just to have global distribution in their bedroom but also to have a Hollywood studio so now everyone in the world can not only distribute content for free to everyone else but also you don't even need creative ability you can generate Hollywood level content in your bedroom so despite this uh you would imagine you know creators would be the most powerful most influential most wealthy people in the world but despite this there is no golden age for creativity uh we're actually in a little bit of a Dark Age is where Hollywood is on strike for 6 months out of last year these are some of the most sophisticated creators in institutions in the world and people online that are trying to create for living they're not doing much better uh and our belief is it's not you know we're not going to solve this problem by building a better model by having stronger performance or cheap or more efficient models you know I spent two years at Deep mindes before uh coming and building story and obviously those things are happening but I think the real gating problem the real unlock is actually around improving our IP system and so just to get a little bit deeper into the problem you're starting to see now because everyone has access to generative AI you're starting to see really fascinating experiments right so you're seeing people take Drake's voice and the weekend's voice and turn it into a top SoundCloud hit that goes to number one uh on those charts or you're seeing people take their favorite IP franchises like Harry Potter and actually remix it in the style of banaga or of a director like Wes Anderson and they're getting tens of millions of views so these are really interesting experiments but also it's a lose lose situation right if you're JK ring someone's using your you're not monetizing on the back of that and also if you're this Super Fan that spent all this time Building Together almost like a short film around your favorite franchise you might get a cent assist and your and your content will get taken down so we want to turn that lose-lose situation into a win-win situation um uh and also you're starting to see this problem persist not just in the world of media this isn't just experiments with top creators or top IPS this is happening across some of the largest institutions in the world uh as you know uh open AI was sued by the New York Times for regurgitating Content that was behind the pay walls so this is a persistent problem that is affecting media that is affecting journalism and is going to affect all different forms of Ip in the future and ultimately I think this amounts to essentially a new naps are moment where we have a Godlike technology uh that is extremely powerful and people are pushing the boundaries of it but we have no way how we can monetize it sustainably and uh make this something that's a plus for creators uh rather than something that they had to fight against so ultimately I think what will happen if we continue down the status quo if we if we just continue down this path AI gets keeps on getting better and we don't have a new IP system underneath it I think we're going to see basically a tragedy of the comons and if you can think about the internet as this wide uh grassy field and the Yelps and the reddits and the user generated content constitutes the grass right that we're all benefiting from uh but these AI models are essentially training on all of this data all of this IP and not putting anything back right so you have the situation where everyone is taking and taking and taking but there are no new incentives as a Creator to continue to contribute to this common pool of content which makes internet so special and just to dive into a very specific example imagine that you're a travel blogger right in the web 2 era which was just a couple years ago you would probably post a travel blog you know maybe your favorite restaurants in San Francisco and that would go on a Blog and in the old social contract of the web you would basically strike an implicit deal with Google where if you got enough views you could run some ads on your blog and maybe make a little bit of Revenue and this wasn't a perfect model but worked uh for many many people fast forward to today now if you're writing the travel blog on your 10 favorite restaurants in San Francisco what's happening is perplexity is scraping that information and if someone has that question they're going to go to perplexity and they're going to get a watered down summarized version of your content for free and no one's even going to know that you wrote the travel blog at all so the what's going to happen is that if you're writing the travel blog you're doing it probably not even for money you're probably doing it for views and to build a community and to have your work impact people uh and now that's not happening at all because no one's even VIs your work so essentially what you're going to do is you're going to stop writing that block and this isn't just an isolated example of a single travel blogger this is a phenomenon that's going to happen all around the web and that's going to lead to the tragedy of Commons that I was just talking about so ultimately I think we're basically at a Tipping Point when it comes to the intersection of AI and IP uh where AI right now is basically causing this tragedy of the commons and it's causing this L lose adversarial situation between creators and their communities and people using AI but I also believe and we believe at story that we can actually use AI as a Force for good it can be a force multiplier it can help creators monetize the question is how do we how do we choose a different path and how do we go away from this tragedy of the common situation that we're hurdling towards uh ultimately I think that the real problem here is that we're trying to take a basically a printing press era set of copyright laws this pen and paper legal system invented hundreds of years ago uh and we're slapping it onto these Godlike Technologies of generative Ai and of social media and of course that's not working of course we're seeing the cracks at the edges uh what story is trying to do is to update the IP system so it's not based on uh you know armies and hordes of lawyers mountains of legal paperwork but rather based on a software uh based system that can scale at the speed and the scale of the internet so what essentially we think uh story is that blockchains will be the fabric that will constitute the next generation of Ip infrastructure so how does this work and how does this address some of the problems I just mentioned number one it's about playing defense it's about protecting creators from Ai and so on Story one of the options is that creators again can set the terms can program their IP and the rights around that and they can choose to opt out of AI training but what's more important than just playing defense and what I'm much more excited about is playing offense right it's not just about how do we opt out how do you you know stay off my lawn it's about actually how can we lean into AI how can we turn IP into a network where people can build on top of it and monetize on top of it and so ultimately what what we're doing at story is allowing people to let's say reg their voice or their unique artistic style and then model uh trainers can leverage that IP and build fine-tune models or almost create their own models around it and if that model monetizes right if you're Drake and your fan is training a model on your voice and they're Distributing that and that becomes a hit on Spotify maybe you can set the terms that 90% of the revenue goes back to you so we think this is a unique opportunity for creators where they can leverage Ai and stories technology to basically build uh content and uh distribution networks that would be much bigger than if they're playing in a single player mode and ultimately uh like I said before we all have this Hollywood studio in our phones in our computers in our bedrooms and so now the entire world can create this is a really unique opportunity and if the entire world can create and they can monetize around all of the internet's content in a sustainable way where they can create these win-win situations we think that's going to be very transformational and then in the future of how IP is actually developed uh and this isn't just you know about technology this isn't just if we have a and if we build this blockchainbased IP system then magically you know content will will spawn it's actually something that we've seen as a trends for the past two decades of the internet and its entire history which is that people want to build on top of content they want to remix content together so the biggest social media platforms today they're Tik Tok uh YouTube shorts Instagram reals they're all based on remixing you're seeing Duets and and this sort of remixing power social media and not only that if you look at the you know top 100 websites by traffic uh today uh every year three out of the top 100 are still fan fiction websites I'm not sure if you've been on these websites they're like Archive of Our Own uh there's a few other examples they are not very very well-developed websites they kind of look like their '90s Craigslist UI right so they're still HTML based websites but still they have billions and billions and billions of views every single year so people love building on their favorite franchises people love remixing and Ai and what we're doing at story is only going to supercharge that and add the financial rails to create networks out of content so ultimately ultimately what we want to see is a shift in the way that IP is created on the internet away from this top down development where you have one exec uh in a suit and tie in a back door of a Hollywood studio basically deciding a franchise for 10 years and instead a type of IP development that transcends different applications that transcends different communities that comes from the bottoms up and it almost looks like this graph of uh the Linux being developed in an open source way except we're adding value capture built in so if you contribute to a fr you can get rewarded based on the terms that we set and to return to what we're talking about with AI ultimately I see this as a sort of state of the world in the development of AI we're kind of right now focused on this bottom right corner right and so you're seeing uh companies respond to this IP Problem by creating massive licensing deals right so if you're open AI you're doing a deal with Reddit for tens of millions of dollars and Reddit is going to give you your data and they're doing these deals one by one in a sort of unsustainable way I think that this is regardless of where you are the Spectrum regardless of whether you are a Reddit user you are the owner the business owners of Reddit or whether you are open AI itself I think this is entirely unsustainable if you just think about the logic of these relationships so why is open AI paying $10 million to Reddit they're paying Reddit $10 million to shift eyeballs away from Reddit the platform and towards chat gbt uh what happens when those eyeballs start moving away from Reddit and towards open aai is that as a redditor as someone who's posting regularly on Reddit well you're not there to make money you're there to you know get up votes you're there to engage with the community and as that Community shifts away from Reddit because people are all looking at the chat gbt outputs well that Community starts to die so Reddit slowly loses more and more users over time because of this open AI deal and then maybe two years in or three years in or four years in open AI realizes well there's actually not that much content on Reddit anymore and every year it's it's getting smaller and smaller so the next deal might not be $10 million it might be 5 million and the one after that might be just two and a half million and then before you know it reddit's gone and open AI doesn't have this source of data so if you're a redditor you're watching your platform get suck dry if you're read at the platform you're also watching users go away that's literally why you're getting paid and then for open AI in the final analysis even for these large model companies they need a source of live IP they need a source of live information and that's the tragedy of the commons that's happening so we don't think this bottom right corner is sustainable at all we think it's sort of a local situation that we're stuck in on the other hand there are interesting experiments to open up Ai and you're seeing that with meta in their llama models but that's only possible if you're Mark Zuckerberg and you can bankroll tens of billions uh in in develop from other Revenue sources to develop open source AI without a business model so ultimately where story wants to push uh the needle is to move into this top right corner where you have the ability for an open internet anyone can upload their IP their voice their their images their their music and they can set the terms for how models can train upon that and model trainers can actually take advantage of this unique IP build models that can monetize and have this open but value capturing way of developing the next generation of models and also of content so that's the future that we like to see with AI uh and now I want to talk a little bit about our ecosystem and and I've talked about a lot of abstract Concepts I want to bring this down to earth and show you guys what I really mean by programmable IP and some of the visions of the future that I just shared uh so at story we're very lucky even though we're just starting out to have a broad swath of ecosystem Partners we have uh you know around 50 applications already live on testnet today but today I want to just show a few examples just so you guys can have a concrete image of of what's happening so the first example I want to show is more of a single player mode where you have a single app and they're using stories programmable IP technology to streamline uh ugc in licensing uh via AI in the single app so it's an app called ablo and basically they're a digital fashion AI remixing app that has worked with Brands like Balmain and Balenciaga and smiley and they're continuing to work with other big Brands like Polo essentially what they do is they allow fans of these Brands to use AI to customize merge items so this is what's happening right now uh a real I think it's a b main shoe we actually have a few copies of this one uh and basically you can imagine that you know okay you're a fan you're creating this design and this shoe gets published on social media after you're done now let's say there's certain conditions that has set so if you have 10,000 followers and this post of the shoe gets say 100,000 likes then they'll actually print it and they'll print that shoe they'll distribute that shoe and any Revenue that comes out of that shoe gets instantly split between the original Creator as well as the platform as well as balain the brand and that all happens seamlessly via Story the second example I want to show is actually a more multiplayer example so instead of just having one app leverage story almost like a single player tool this is an example of story evolving into a network into that IP Legoland I was talking about so uh this is an app called magma they're fully web to app two and a half million users it's kind of like figma but for visual artist imagine you create an anime character on magma with your friends you can instantly register on story with no web 3 ux you can set the terms for how anyone else can build on top of your character how they can license it and leverage it and publish it to story in a single click the moment that IP is published on story every single app that's integrated with our API has access to this IP This Global pool so imagine you're a second person you're a Creator you don't know the first person on magma and you're just searching the IB Hub which is like a GitHub for IP that we built and you want to find an anime character to use you can find that character you can see all the terms associated with it and you can instantly with one click leverage that character and build on top of it on any other app that's integrated with story in this case the second person is choosing to use mahogan which is a sort of AI remixing app where you can use images as prompts rather than text and they're going to remix this character in a way that they want so after they're done they'll select their favorite version of that AI generated remix and that remix version will get instantly registered as a derivative on story so now we're building This Global IP graph now a third person who has never heard of any of these two people can be building a web comic on seai which is an AI power webcomic app and they can actually find this character in the character selection screen and they can create a web comic around this character if they like it uh and when they do if they monetize because uh SEI has these micro payments enabled then that Revenue would flow through to every single person along the chain starting with of course the person who created the comic on seai flowing to the person who remixed it on mahogan and even to the original Creator on magma all of this happened seamlessly without anyone having to talk to anyone else just because these developers integrated stories API so ultimately that's what we mean when we say IP Legoland that's a concrete example of what it feels like and looks like to have every single piece of content on internet programmable and we think this is going to affect not just content in general not just consumer apps like the ones I just showed you but also the future of AI development and it's going to empower creators to own their IP and lean into AI as a force to extend their growth in this almost open source way as opposed to trying to defend against it and protect against it uh and so that's a little bit about story about the IP problem and how we think blockchain can solve it uh we will be here for the rest of the weekend and we have a lot of different prizes for using different parts of stories protocol we're very excited about as I mentioned AI applications but also what we're doing is on- ramping a trillion dollar asset class of IP on chain that people naturally understand that people want to play around with and so we're excited to see ipy and defi applications around what we've built as well uh and with that I'll wrap it up and I appreciate all of you guys for hearing a little bit more about what we're doing over at story thank you [Music]