The crypto arm of venture capital firm Andreessen Horowitz (a16z) has announced its participation in an $80 million funding round for San Francisco-based startup PIP Labs. PIP Labs is the company behind Story Protocol, a blockchain-based solution focused on addressing intellectual property (IP) theft perpetuated by artificial intelligence (AI) tools.
According to an announcement from Story Protocol, it has raised $140 million across three funding rounds. Apart from a16z, this latest round also saw investments from entities such as Polychain Capital and Samsung NEXT and individuals like Stability AI’s Scott Trowbridge and former Coinbase CTO Balaji Srinivasan.
Dixon says AI and creatives will coexist peacefully
In his announcement of the deal, Chris Dixon, the managing partner of a16z crypto, described it as a tool that will enable AI systems and creatives to coexist happily. He explained that the blockchain-based protocol solves the core problem by helping creatives protect their works on the internet in the age of generative AI.
The a16z exec gave a background of how the internet currently functions in a way that benefits both creators and platforms. However, the arrival of AI is already changing that. By training AI models on human-created content to generate AI content that does not credit the source, the new technology is breaking an “Economic Covenant.”
Dixon expects the Story protocol to fix that problem and restore balance. Through the platform, creators can register their IP and track its use to fully protect their IP rights.
He said:
“For AI systems and creative people to both thrive, creators need a modern way to ensure they get compensated for their work. Story takes a proven approach — intellectual property law — and updates it for the age of AI.”
Notably, a16z’s strong support for Story Protocol stands out, as they also participated in both the seed and Series A funding rounds. While this highlights a16z conviction in the startup, it is not surprising.
There is a growing need for tools to counter AI copyright infringement, especially as more AI startups continue to violate copyright laws. Several AI startups, including OpenAI and Perplexity, have faced lawsuits or threatened-lawsuits for copyright infringement.
IP protection is built on the blockchain
Following the latest funding round, Story Protocol is now valued at $2.25 billion. This is not a surprise given that it combines two of the hottest technologies currently—blockchain and AI—making it a prime investment product for VC firms.
However, investors and founders claim it is not just buzz without value. A16z noted that the company co-founders have strong backgrounds. Seung Yoon Lee developed and sold the serialized fiction app Radish for $440 million in 2021, while Jason Zhao is a former engineer at Google Deepmind.
The founders are equally bullish about their product. Zhao described their platform as a purpose-built layer-1 network serving as the World IP blockchain. This will make it a place for creators to register IP and a platform to deploy applications designed for IP protection and usage. The platform already has a few apps and has promised more in the coming days.
Meanwhile, the Story protocol’s proposition is not entirely novel. Several governmental organizations, including the European Union and the World Intellectual Property Organization, have also considered using blockchain technology for IP protection.