The lawsuits are starting to heat up.

Elon Musk suing OpenAi is the tip of the iceberg. Actually, that one has nothing to do with the avalanche of legal activity that is going to affect OpenAI along with many other entities behind the LLMs.

At the core is the use of data. The NY Times has already sued OpenAI for, according to the claim, using its content to train the software.

The next flood could come from people claiming that the LLMs were trained using copyrighted material, hence that it what it essentially returns.

AI chatbots are facing issues of copyright with poets, artists, etc after mimicking their work in searches. Bloomberg in its report says that AI Chatbots like ChatGPT in its quest to become the most disruptive technological force since the internet’s creation, these generative artificial intelligence systems have devoured millions of songs, beat poetry, draft contracts, movie scripts, photo essays, and novels from the 19th century, among other materials.

What we have brewing is a collision between the legal realm, which is slow to change, and technology. The latter is moving ahead at warp speed, something the legal world is not going to be able to withstand.

Image made using Ideogram

Web 3.0 Has A Solution By Replacing The Entire System

The digital world formed in a way that, to a large degree, mirrors the existing world. Web 2.0 is not much different from what we see in other areas. The siloed system has a few dominant players who control much of the whole. If I am not mistaken, this sounds a lot like governments.

Over the last couple decades, the legal environment tried to apply its physical world framework into the digital realm. now we are starting to enter the phase where that is no longer possible. Certainly, I do not profess to be a legal expert since I am far from that. What I do know is the present system is ill-equipped to deal with what is happening in the digital.

It is also ironic how things are moving around.

Google, a company that never met a DCMA notice it didn't ignore, is NOW stating that OpenAI might have violated its rights if Sora was trained using YouTube videos.

Suddenly, Google is the victim.

Welcome to the world of Web 2.0 entities trying to remain relevant.

What these chatbots are doing is accelerating, by an order of magnitude, the pace at which information is generated and distributed. Here is where the system is rapidly being reworked. Obviously, since we basically are dealing with the information economy, this will have profound impacts.

Not everyone, of course, is going to like the outcome.

Thus, we can see where the opportunity for something much bigger to enter. To me, this is Web 3.0. It is the bull that is going to crush everything in this China shop. We are watching a new system develop.

Disruption occurs when two things happen.

The first is the technology exists to alter the industry or market. This is accompanied by the need for something different.

Google claiming that its property rights are potentially being violated is the height of absurdity consider the videos were placed by individuals. The idea that "it is my platform thus my property" is what these entities thrived upon.

Now, we are seeing something different emerging.

No Door To Knock On

The need for data is not going to die off. In fact, it is likely to accelerate as we see different technologies expand.

We often discuss the idea of ownership. What gets interesting is the concept of nobody owning the data.

People are accustomed to giving away "their" data. Actually, this is the wrong way to phrase it. Mostly, people willing generate data for the benefit of others. They willing show up on Facebook, YouTube, and X, adding to those databases on a daily basis.

With Web 3.0, we see something different. The individual doesn't own the data that is placed on a network. Instead, it is essentially unowned. It is placed online and free for anyone to utilize.

Of course, this brings up a host of other topics in terms of monetization through tokenization which is outside the scope of this article.

Nevertheless, it is a way for the world to generate the data required without the nonsense we are seeing.

We know Reddit recently sold their data for the healthy sum of $60 million per year. What did those who actually generated it get for their efforts? Nothing. Could it be those who posted were actually shareholders? Since the company is now only going public, that isn't the case.

This is typical Web 2.0 social media. For decades, individuals showed up and utilized the application only to see the financial benefits being directed elsewhere. This is fine since there was never the promise of financial returns and people were willingly engaging with these types of applications.

That said it is time for something new.

And with this new system, there is no door to knock on.

Here is the epicenter of the present legal system. There needs to be somewhere to send the subpoena. Without a door to knock on, there is nothing.

Or another way of looking at it, if there are too many doors, what happens?

We saw with this the file sharing mess a couple decades back. While the legal establishment could go after Napster, how could it go after millions of people sharing files? The solution was to tRY and make an example out of a few. The problem with this is we are dealing with global technology.

People were located aLL over the world.

Create New Monetization Structures

The potential of Web 3.0 is the ability to create new monetization and ownership structures.

How do people profit when their data is located on in an open, permissionless database. Here is where innovation and experimentation arise. It is up to individuals and application creators to develop ways for this to happen.

Tokenization is revolutionary. The ability to create money means opportunities exist that never did before. It is at the core of this transition we are seeing.

At the same time, money is going to, once again, go through its own transformation. How it looks in 20 years is anyone's guess. What we are dealing with is data, something that is enormous value as being evidenced by what is taking place.

The law is now turning to the developers and going after them. If decentralized entities cannot be controlled, the governments will exercise their power by going after those who write the software. We already saw a few instances of this.

How well do you think this will work?

The point being is we are at the crossroads where the ineptitude of the existing system is being exposed. We are no longer dealing with a physical world based upon imaginary lines in the dirt. What is Google (or the NY Times) going to do against all the LLMs trained using its data in China? Or Russia? Or anywhere else?

What is going to happen when a LLM like Llama3 can be trained for $10K like some are predicting in a couple years? Is the NY times going to sue every start up around the world that it things is using copyrighted data?

These entities are relics compared to what is taking place. We are watching a new system unfold. Without a new business model, all these companies are going to be crushed. Of course, they are running the same old script. When threatened, turn to the governments to try and protect their nest egg.

Ultimately, it doesn't work.

In an era where technology is advancing at a pace that was unfathomable a decade ago, it is game over.

The only saving grace for these institutions is Web 3.0 is rather slow in developing. If it was rolling out at the pace of the chatbots, their business models would implode overnight.

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