The Indian government is poised to introduce a significant shift in how Artificial Intelligence (AI) models are trained within the country. An eight-member committee, constituted by the Department for Promotion of Industry and Internal Trade (DPIIT), has proposed implementing a mandatory royalty system for the use of copyrighted content in training AI models. This potential move has sparked considerable concern among global AI giants such as OpenAI, Google, and Microsoft, as they may now be required to pay royalties for training their AI models in India.
Formation and Mandate of the DPIIT Committee
The DPIIT established this eight-member committee earlier this year, specifically on April 28th. The primary objective of this committee was to examine issues related to generative AI within the ambit of existing laws and to provide necessary recommendations. The committee was tasked with formulating a royalty system concerning the use of users' text and. Video data by generative AI model developers for training purposes, either with or without explicit permission. This crucial recommendation is slated for consideration within the next 30 days,. Potentially setting a new precedent for the future of AI in India.
Rejection of the Zero-Price License Model
The committee, in its recommendations, explicitly rejected the 'zero-price license model' system. This model typically allows AI developers to use copyrighted content without any cost, offering no incentive or compensation for human creativity. Instead, the DPIIT committee emphasized the importance of incentivizing human creativity, advocating for a mandatory royalty system for AI model training. This approach marks a significant step towards safeguarding the rights of creators and ensuring fair compensation for their work.
Outline of the Proposed Hybrid Model
As an alternative to the zero-price license, the committee has put forth a 'hybrid model'. Under this proposed model, AI developers would be required to obtain a 'blanket license' to legally access all copyrighted content necessary for training their AI models. This blanket license would grant them permission to use a wide range of materials, albeit under specific conditions and frameworks.
Crucially, the proposed hybrid model stipulates that the price of royalties for copyrighted content or human creations will only be triggered when the trained AI model or tool is commercially launched. This means AI developers wouldn't be liable for royalty payments until their AI product enters the market and begins generating revenue. The actual royalty rates will be determined by a dedicated committee established by the government. Also, the framework ensures that these royalty rates will be subject. To judicial review, thereby maintaining transparency and fairness in the process.
Centralized Mechanism for Collection and Distribution
The committee has also proposed the establishment of a centralized mechanism for the collection and distribution of these royalties. The aim of this centralized system is to reduce transaction costs, provide legal certainty, and offer support to both large and small AI developers. This system is designed to ensure that royalty collection and distribution are conducted smoothly and efficiently, benefiting all stakeholders involved in the AI ecosystem.
India's AI Market and Global Context
The eight-member committee also highlighted the rapidly expanding market for generative AI tools in India. They referenced a statement by OpenAI CEO Sam Altman, who identified India as the world's second-largest market for AI after the United States. This underscores India's growing prominence as a hub for AI innovation and adoption. AI companies are generating substantial revenue from Indian users, and this proposed royalty system aims to ensure. That a portion of this revenue reaches the creators whose content is utilized to train these AI models. This move could position India as a leading regulator in the AI space, striving to balance creativity with technological advancement.
