Shutterstock Inc. SSTK, a well-known platform for images and videos, has entered into a partnership with Reka AI, a startup specializing in large language models. The financial terms were not disclosed.
As part of this partnership, Reka will license Shutterstock’s extensive library of digital visual assets to assist in developing frontier-class multimodal language AI models.
In addition to continued investment in human-created metadata, Shutterstock expects to leverage Reka’s multimodal models to augment details and improve the metadata attached to its library of digital assets.
The licensing business with AI firms generated $104 million in revenue last year, CEO Paul J. Hennessy said in an interview, according to a report from Bloomberg.
Meta Platforms Inc. META, Alphabet Inc. GOOGL, Amazon.com Inc. AMZN, and Apple Inc. AAPL are among the key clients of Shutterstock’s training data, Reuters has reported. In 2023, OpenAI secured a six-year agreement with Shutterstock.
Reka CEO Dani Yogatama said, “As we continue to develop frontier multimodal AI models, it was critical for us to partner with Shutterstock given its comprehensive source of legally licensable content with best-in-class, human-created metadata.”
AI models require vast datasets to power tools such as chatbots, which generate text, video, or audio in response to user requests.
However, the use of copyrighted materials by AI companies is under growing scrutiny. Companies like Midjourney, OpenAI, and Stability AI have faced lawsuits for using internet-sourced content to train their models, Bloomberg reported.
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This growing demand for data has created new opportunities for Shutterstock, whose traditional business of licensing media to advertising and creative firms has seen a decline.
As per the report, other firms are similarly monetizing their data by licensing it to AI companies. For example, Reddit Inc RDDT earns approximately $60 million annually from Google and has a deal with OpenAI.
Adobe Inc ADBE, a competitor of Shutterstock, uses its image library to develop its AI model, Firefly. Getty Images Holdings Inc GETY has an agreement with AI video startup Runway.
In February, Shutterstock reported holding 771 million images, 54 million videos, 4 million audio tracks, and 1 million 3D figures.
Shutterstock anticipates 2024 revenue for the business unit, including the AI licensing, to be $138 million, consistent with last year.
The company projects this segment will generate $250 million in sales by 2027, attributing the current plateau to evolving contract structures instead of a lack of AI customers.
Price Action: SSTK shares are trading lower by 2.13% at $38.70 at the last check Tuesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Photo via Shutterstock
