E09: AI reshapes music industry, Apple's stealth AI play, India's tech potential

In this episode, the hosts discuss AI in the music industry, Apple's partnership with OpenAI, and the funding landscape for AI startups in India. They explore the question of whether the music industry should embrace AI or protect themselves, highlighting examples of AI integration in the industry, such as music generation and personalized playlists. They also examine Apple's approach to integrating AI into their devices and the potential impact on user experience. The conversation touches on the challenges of copyright infringement in AI models like Perplexity and the potential for AI to democratize music creation. Lastly, they discuss the funding trends for AI startups in India and the opportunities and challenges in the Indian AI market.

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Take-aways

• The music industry is exploring AI integration, with examples including music generation and personalized playlists.
• Apple is integrating AI capabilities into their devices in a seamless and non-disruptive way, enhancing user experience.
• Copyright infringement is a challenge in AI models like Perplexity, highlighting the need for updated legal and technical solutions.
• The funding landscape for AI startups in India has seen a decline, but the country remains an attractive market for growth and investment.

Episode Transcript

Introduction

Chris: Welcome to the Chris Rod Max show, where we discuss the latest AI news, speak to AI founders, and explore what it all means for society and humanity. I'm glad to have you back, Rod and Max. How are you both?

Max: Feeling good!

Rod: It's been an eventful week, but we're fantastic. Always happy to be here.

Chris: Great to hear. Today we have three fascinating topics to discuss:

1. AI in the music industry
2. Apple's partnership with OpenAI and their AI strategy
3. Some interesting AI news snippets

Let's dive in!

AI in the Music Industry

Chris: The big question here is whether record labels and artists are embracing AI or trying to protect themselves from it. We've seen some interesting developments:

1. Universal Music Group partnered with Sound Labs to create Mikdrop, a service allowing artists to generate music from voice snippets.
2. Several record labels are suing AI startups like Suno AI for copyright infringement.
3. Spotify is integrating AI features to create personalized playlists.

Max, what are your thoughts? Should the music industry embrace AI or protect itself?

Max: I think it depends on the use cases. AI hasn't reached its full potential in music yet, but embracing and understanding it makes sense. As the saying goes, "It's not AI that will replace your job; it's the person who embraces AI that will replace your job." This applies to the creative industry too.

Chris: Good point. Rod, what's your take on this?

Rod: I see this as one of the greatest technological wars happening. AI is challenging all the traditional business models for creating and monetizing content. Historically, it was easy to negotiate copyright agreements with a few radio and TV stations. But now, with numerous AI startups and projects, it's becoming impossible to control distribution and protect copyrights. We need to move from a purely legal solution to a technical one, like implementing robust Digital Rights Management (DRM) systems.

Chris: Interesting. So you're saying it's becoming harder to know who to contract with in the AI era?

Rod: Exactly. AI models and data pipelines don't respect traditional agreements. Companies are scraping data from various sources without proper authorization to train their models. This creates a complex situation where it's challenging to enforce copyright and negotiate fair agreements.

Chris: That's a crucial point about copyright infringement. It reminds me of the ongoing lawsuit between Scarlett Johansson and OpenAI over voice cloning. Many artists have signed an open letter urging the AI community to respect their IP. From an artist's perspective, it makes sense, given that they often receive minimal royalties.

Max: This reminds me of blockchain technology being used to track IPs. The current music industry business model based on royalties might not work in a world of AI-generated content. We need to rethink how value is created and captured. It'll be interesting to see how this plays out, both technically and legally.

Chris: Absolutely. I think there are two key takeaways here:

1. We need innovation in copyright and patent laws to protect data creators and reward them when AI uses their work.
2. AI is democratizing music creation, allowing anyone to compose songs and melodies with just a prompt. This could completely change the industry's landscape and business models.

Rod: It's like the next chapter of what DJs and electronic musicians started in the 70s with sampling. The questions of added value, royalties, and credit attribution are still relevant today.

Max: This democratization might also give more power to individual artists. For example, some singers don't own the rights to their voices because they belong to record companies. AI could potentially change this dynamic.

Chris: Great points. To summarize, we're seeing a technology that democratizes music-making, while established players like Sony Music and Universal Music Group are trying to both protect and embrace it. The key takeaway is that data protection and copyright laws need an update for the AI era.

Apple's AI Strategy

Chris: Moving on to our second topic: Apple's partnership with OpenAI. The question is, what does this mean for consumers? How will we interact with our phones? Will there be a more powerful Siri?

Ben Evans wrote an interesting piece on this. The gist is that Apple sees OpenAI's technology as an enabler for various use cases, not as a standalone product. They're integrating AI seamlessly into their devices. For example, AI might prioritize emails in your Apple mailbox without you even noticing.

For more general knowledge questions, Apple would use third-party models like OpenAI's, without sharing personalized user data. Rod, what are your thoughts on this approach?

Rod: This connects to our previous discussion about how AI innovation impacts different players in the software industry unequally. Existing software businesses like Salesforce or Spotify need to figure out how to integrate AI functionality without creating entirely new products or disrupting their user base.

Apple is leveraging its massive install base of powerful devices. Instead of creating dedicated AI tools, they're integrating AI features into existing applications. This keeps users within their ecosystem and prevents the world from becoming just a simple input box where everything is done through AI prompts.

Max: I think Apple's approach makes sense from several perspectives:

1. Control of the entire stack: Apple has been moving towards controlling more of their hardware and software components. This AI integration follows that pattern.
2. Learning from partners: By partnering with OpenAI, Apple can learn how AI models work while treating them as a commodity for now.
3. Value creation: AI features that were once expensive add-ons (like spell-checking in the past) can now be offered for free, adding value to their products.

From an economic perspective, it's a smart move. Apple is looking at use cases differently compared to other players in the market.

Chris: Excellent points. Apple's approach of enhancing their devices with AI capabilities is indeed clever. It could justify the premium price of iPhones and showcases the power of a closed ecosystem.

Rod: It's interesting to note that even as major players integrate AI features, there's still room for specialized products. Take Grammarly, for example. Despite similar functionality being integrated into Google Docs and Microsoft Word, Grammarly continues to be successful with its specialized offering.

Max: True, it depends on the use case and the user's needs. For casual users, built-in AI features might be sufficient, while professionals might opt for more specialized solutions.

AI News Snippets

Perplexity's Copyright Infringement Allegations

Chris: Let's wrap up with two news pieces. First, there are allegations that Perplexity is infringing on copyrights. Rod, can you tell us more about this?

Rod: Perplexity is an answering service that provides sources for its responses, unlike ChatGPT or Claude, which don't always cite sources. However, Perplexity is accused of crawling and using content from websites that explicitly restrict such usage through their robots.txt files.

While Perplexity claims they're not directly responsible for the data collection, relying on third-party services, this raises ethical and legal questions about copyright infringement and respect for website owners' wishes.

Chris: So, essentially, Perplexity is ignoring websites' requests not to use their content and summarizing it anyway. Interestingly, they're deflecting responsibility to their third-party providers.

AI Funding in India

Chris: The second news piece is about AI funding in India. While AI funding is increasing in the US, it seems to be decreasing in India. Max, as someone in the startup space, what's your take on this?

Max: The funding drop in India (80% decrease in 2023) compared to the US (211% increase) might be misleading. Here's why:

1. Talent pool: India has a large pool of tech talent due to its history in business process outsourcing and software engineering for global companies.
2. Knowledge transfer: As Indian talent works with AI in large corporations, they'll eventually start their own ventures, leading to a potential funding increase in the future.
3. Language diversity: India's numerous languages present both a challenge and an opportunity for AI development.
4. Political will: The Indian government's support for technological infrastructure could extend to AI, potentially boosting public service applications.

Despite the current funding drop, India remains an attractive place for VC funding and AI development, especially in creating language models for Indian languages.

Chris: Great insights, Max. Indeed, India's vast population and linguistic diversity make it an exciting market for AI development. Despite the current funding slowdown, India's potential in the AI space is undeniable.

Conclusion

Chris: To summarize our discussion today:

1. The music industry is grappling with AI's impact, seeking new business models and copyright protection methods while also embracing the democratization of music creation.
2. Apple is integrating AI capabilities into its ecosystem in a non-invasive way, leveraging third-party providers while maintaining control over user experience.
3. We touched on Perplexity's potential copyright infringement and the evolving AI landscape in India.

Thank you both for your insights. To our listeners, if you enjoyed today's show, please don't forget to follow and subscribe to our channel. We'll see you next time!