Tag: Bill Gross

This Startup Has Built an Algorithm to Pay Creators for Their Work Used to Train A.I.

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Some startups are exploring the revenue-sharing model to solve A.I.’s growing IP dilemma. Alex Shuper/Unsplash

OpenAI, the creator of ChatGPT, has come under fire from publishers and artists who alleged the company scraped their work from the internet to train GPT, its large language model, without their consent. These concerns have sparked lawsuits against the A.I. giant on accusations of copyright infringement, highlighting a major ethical dilemma that comes with pushing A.I.’s capabilities forward. Some startups are exploring a solution that focuses on sharing revenue with content creators. In August, Perplexity AI, an A.I.-powered search engine, introduced a program to pay publishers a portion of ad revenue generated by search queries if their content informs its outputs. ProRata.ai, a startup founded by a pioneer of the early internet monetization model, is developing a similar algorithm to compensate publishers, authors and other creators whose work is used to train generative A.I.

ProRata claims it has created an algorithm that can review an A.I.-generated output, identify the source of information based on novel facts and textual styles, and calculate how much each source contributed to the response. These percentages are then used to cut checks to these creators at the end of every month—a model that, in theory, could help protect the livelihoods of creatives and prevent future lawsuits around intellectual property.

“If you don’t share, then creativity is unsustainable. There’s no way for you to make a living,” ProRata’s co-founder and CEO Bill Gross told Observer regarding the careers of artists. Gross is credited as the inventor of the pay-per-click monetization model for internet search with a company he founded in the late 1990s that was later acquired by Yahoo, according to ProRata’s website.

The startup, which raised $25 million from venture capital firms Mayfield Fund, Prime Movers Lab, Revolution Ventures and IdeaLab Studio in a series A funding round in August, is set to showcase the algorithm through an A.I.-powered search engine expected to release in October. Starting at $19 a month, the engine will monetize queries through advertisements and subscription payments, according to Gross. While 50 percent of the revenue generated will go to ProRata, the other half will be split proportionately across creators.

ProRata’s ultimate goal isn’t to create an alternative to Google Search, but to introduce a new business model that search engines could adopt to ensure creators get paid for their contributions to A.I. “We want to make that the industry standard,” Gross said. While A.I. search features from Google and Microsoft’s Bing don’t directly share ad revenue with publishers, they refer users to links from publishers as a way to drive traffic to their sites.

The answer engine will only be trained on data from creators who partner with ProRata. That means the model will draw from a limited amount of data that could potentially compromise the accuracy of outputs. Still, ProRata isn’t focused on making its A.I. search engine a standalone product but rather on having the pay-per-use model adopted by major search engines.

So far, the company has inked deals with publishers like The Atlantic, Fortune, Financial Times, Time, and Axel Springer, the German company that owns Politico and Business Insider. Authors like Walter Isaacson, Adam Grant, and Ian Bremmer have also agreed, as have music industry veterans like Universal Music Group. ProRata hasn’t encountered any resistance or skepticism from its partners yet, according to Gross. “Most people just want us to be wildly successful so they’ll get a paycheck,” the CEO said. The real challenge, he notes, is convincing Big Tech companies who’ve been crawling web data for free to adopt ProRata’s business model.

“It’s amazing to me that some of the people think that crawling is not stealing,” Gross said. “Basically, Mustafa, the CEO of Microsoft A.I., came out and said, ‘Hey, if it’s available on the web, it’s free for us to use.’ And that’s just bullshit,” Gross added, referring to comments made by Google Deepmind co-founder Mustafa Suleyman during a CNBC interview in July when asked if training A.I. models on web content is akin to intellectual property theft. “Just because something is available and visible doesn’t mean it’s open source,” Gross said.

ProRata.ai CEO Bill Gross. Andres Castaneda

Paying creators may be a temporary “Band-Aid” solution

Financial compensation may not fully address the ethical concerns of having a creator’s work used for A.I. training without explicit permission, according to Star Kashman, a tech lawyer and partner at Cyber Law Firm with expertise in digital copyright law. She cites actress Scarlett Johansson as an example, who allegedly refused to give OpenAI permission to use her voice for ChatGPT despite financial offers.

“Many authors and creators have personal, moral objections to their work being utilized for A.I. training, regardless of compensation,” Kashman told Observer. “Without explicit permission, paying creators may be a temporary ‘Band-Aid’ solution, but it may not be an all-encompassing resolution to deeper concerns about consent and the impact on creative works.”

The “pay-per-use” model could also potentially lead to a new crop of legal issues. Creators may disagree over whether the payment they receive “accurately reflects” what they contributed to the A.I. systems, especially if they can’t set their own rates, Kashman said. Moreover, A.I. tools may favor the work of bigger, more established creators over smaller ones even if their content is more relevant to a particular query, similar to how search engine optimization (SEO) works. Compensation may also not fully protect A.I. companies from being sued for intellectual property theft, which she said could be easier to prove in court with concrete attribution.

“There will continue to be many IP cases until the Copyright Act is amended to allow scraping on copyrighted content for the purposes of training LLMs,” Gabriel Vincent, another partner at Cyber Law Firm, told Observer, echoing Kashman’s comments.

ProRata has plans to diversify its model to include more than just text. After the October launch, the startup will focus on collaborating with music companies, according to Gross. He also hopes to collaborate with video and movie brands as well as smaller, independent creators and plans to license its attribution technology to A.I. companies that can implement it into their own models.

“A.I. is so amazing, but it needs to be fair to all parties,” Gross said.

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Aaron Mok

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September 3, 2024
Star fund manager takes leave amid accusations of cherry picking

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Ken Leech, the longtime Western Asset Management chief investment officer, left that role amid probes from the Justice Department and Securities and Exchange Commission into whether some clients were favored over others in allocating gains and losses from derivatives trades.

Leech, who manages some of the largest bond strategies in the US, will take an immediate leave of absence after receiving a Wells notice from the SEC, the company said in a filing Wednesday. Federal prosecutors in New York are conducting a criminal probe into the practice known as “cherry-picking,” where winning trades are credited to favored accounts, according to people familiar with the matter.

“The company launched an internal investigation into certain past trade allocations involving treasury derivatives in select Western Asset-managed accounts,” the firm said. “The company is also cooperating with parallel government investigations.”

Western Asset said Wednesday it’s closing its $2 billion Macro Opportunities strategy and named Michael Buchanan as sole CIO. Shares of parent company Franklin Resources Inc. tumbled 13% to $19.78, the most since October 2020, extending their decline this year to 34%.

Western Asset, with $381 billion in assets, is one of the original California bond giants and once rivaled Pacific Investment Management Co. and BlackRock Inc. in size. Its key funds have struggled in recent years amid the rise in interest rates, leading to outflows in its flagship strategy, which Leech helped run.

Franklin, which has about $1.6 trillion in assets overall, acquired Western as part of the 2020 purchase of Legg Mason. Leech has worked at Western Asset for more than 30 years, serving as CIO for the bulk of that time.

A Wells notice, which isn’t a formal allegation or finding of misconduct, provides a chance to respond to the agency and try to dissuade it from filing a case.

Leech was a star for years. He co-managed the company’s Core Plus fund as it trounced its peers, though it also stumbled in 2018 when the Fed was raising rates. Since 2021, it has been battered by wagering on a pivot by the central bank.

The $19 billion mutual fund, which is up 2.4% this year, is trailing more than 90% of rivals over the last three and five year periods, and investors have yanked money.

That pullback from Western Asset’s fund stands in contrast to rival ones managed by the likes of Pimco, Capital Group Inc. and BlackRock Inc., which have taken in cash this year as the Federal Reserve prepares to cut interest rates.

“At Franklin, it’s somewhat problematic as the whole reason for buying Legg Mason was to help offset the loss of commission-based sales to drive flows,” Greggory Warren, a strategist at Morningstar, said in a phone interview. “Buying Legg was seen helping provide then with more fixed income and institutional client exposure and being less exposed to fee pressures.”

Western had quietly named Buchanan co-chief investment officer alongside Leech in August 2023. John Bellows, who co-managed Core Plus since 2018, abruptly left at the start of May. A spokesperson for Western earlier said that the firm thanked Bellows for his contributions.

Jim Hirschmann, Western’s president and chief executive officer, said in the statement that Buchanan “has played an integral role in Western Asset’s strategy and growth, and we look forward to having him lead the next chapter of our storied investment team.”

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Silla Brush, Bloomberg

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August 21, 2024
Bill Gross Fast Facts | CNN

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CNN
—

Here’s a look at the life of Bill Gross, founder of PIMCO, Pacific Investment Management Company.

Birth date: April 13, 1944

Birth place: Middleton, Ohio

Birth name: William Hunt Gross

Father: Sewell “Dutch” Gross, a steel company sales executive

Mother: Shirley Gross

Marriages: Amy Schwartz (2021-present); Sue (Frank) Gross (1985-2017, divorced); Pamela Roberts Gross (divorced)

Children: with Sue Frank: Nick; with Pamela Roberts: Jeff and Jennifer

Education: Duke University, B.A. in Psychology, 1966; University of California at Los Angeles, M.B.A, 1971

Military: US Navy, 1966-1969

Billionaire, bond investor, philanthropist and avid stamp collector.

Founder, former co-chief investment officer and managing director of PIMCO, one of the world’s largest mutual funds. Under Gross, PIMCO became the world’s largest bond fund manager.

1966 – While recuperating from injuries suffered in a serious car accident, Gross teaches himself to count cards in blackjack. After college graduation, he turns $200 into $10,000 in four months.

1971 – Is hired as a junior bond analyst for Pacific Mutual Insurance Company.

1971 – PIMCO is formed as a division of Pacific Mutual with colleagues William Podlich and James F. Muzzy.

1985 – PIMCO formally splits from Pacific Mutual.

2003 – Founds the William and Sue Gross Family Foundation, through which millions of dollars are donated to universities, hospitals and organizations.

2005 – Gross and his wife, Sue, give $23.5 million to Duke University for undergraduate and medical school students and for the Fuqua School of Business.

2006 – Donates $10 million to the University of California at Irvine for stem cell research and to help build a new research lab. The lab opens in 2010 and is named in their honor, Sue and Bill Gross Stem Cell Research Center.

2007 – A stamp collector since childhood, Gross auctions his collection of British stamps for $9.1 million and donates the proceeds to Doctors Without Borders.

2009 – Donates $8 million for the establishment of a stamp gallery at the Smithsonian’s National Postal Museum in Washington, DC. The gallery is named in his honor, the William H. Gross Stamp Gallery, and opens in September 2013.

September 2014 – Gross unexpectedly resigns from PIMCO to join Janus Capital Group, where he manages the Janus Unconstrained Bond Fund.

July 1, 2015 – The Smithsonian Institution includes Gross’s old Bloomberg keyboard in its American Enterprise exhibition at the National Museum of American History. The keyboard, used by Gross during the 1990s and 2000s, has function keys for accessing real-time financial information.

October 8, 2015 – Gross sues former employer PIMCO for hundreds of millions of dollars, alleging he was wrongfully ousted from the firm as part of a vast conspiracy. The lawsuit claims a “cabal” of PIMCO executives driven by a “lust for power, greed” and self-interest plotted for Gross’s demise. On March 27, 2017, Gross and PIMCO announce they reached an “amicable settlement.”

February 4, 2019 – Announces he will retire. Janus Henderson (formerly Janus Capital Group) says he will leave the firm on March 1.

October 13, 2020 – Gross and his partner Amy Schwartz sue their neighbors, Mark Towfiq, CEO of data center development company Nextfort Ventures, and his wife Carol Nakahara. Towfiq and Nakahara file a countersuit the next day, on October 14. According to court filings, Gross and Schwartz installed a large art installation along the property line, partially blocking Towfiq and Nakahara’s ocean views. After an investigation, the city of Laguna Beach determined the installation, netting and lights were a violation of city code and did not have the proper permits. Shortly after, Towfiq and Nakahara allege Gross began retaliating against them by harassing and disturbing them with “loud music and bizarre audio recordings at excessive levels” during various hours of the day and night – including pop or rap music, and often a series of television theme songs, according to the lawsuit, including the “Gilligan’s Island” theme on a loop.

October 1, 2021 – Gross and his wife are found guilty in contempt of court after violating a 2020 order that prohibited them from playing loud music outside their home. The two are fined $1,000 each and face five days in jail as well as a ban on outdoor music. Due to the Covid-19 pandemic, however, their jail sentences are suspended and replaced with two days of community service.

March 2, 2022 – Self-publishes his memoir “I’m Still Standing: Bond King Bill Gross and the PIMCO Express.”

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April 3, 2024
'Bond King' Bill Gross warns investors to be cautious as markets are looking dangerous
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Bill Gross.REUTERS/Jason Reed
- Bill Gross has warned investors to tread carefully in today’s treacherous market.
- The billionaire “Bond King” said they shouldn’t cash out but should avoid the riskiest assets.
- Gross argued that asset values increasingly reflect “new fundamentals” like Fed policy and momentum.
Investors should exercise caution in today’s perilous market, Bill Gross has warned.

A century ago, a company’s stock price was largely determined by hard numbers such as its book value or cash flows, the billionaire cofounder of Pimco wrote in an investment outlook titled “Fundamentally Speaking” that was published on Friday.

Today, other factors such as Federal Reserve policies, levels of bank leverage, and momentum play an increased role as valuation drivers, he said. Asset prices could ultimately suffer a result, as negative forces such as spiraling public and private debts and soaring healthcare costs weigh on government budgets and sap market support.

Still, investors “need to at least get on the dance floor instead of being a disgruntled wallflower,” or they risk missing out on gains before the next market calamity, Gross said.

The veteran investor known as the “Bond King” was nodding to a famous line uttered by Citigroup CEO Chuck Prince shortly before the mid-2000s housing bubble burst and a global financial crisis took hold.

“As long as the music is playing, you’ve got to get up and dance,” the bank chief said at the time, underscoring that Wall Street was resigned to taking huge risks while fully aware they could end badly.

Gross countered that “investors should be willing to sit out some dances – even some AI dances that may or may not blossom.” Still, they shouldn’t take cover entirely: “I’m not advocating hiding away in a bomb shelter,” he wrote.

“But be careful,” Gross continued. “These are dangerous times – financially, geopolitically, and climatologically. These three are the market’s new fundamentals.”

The S&P 500 surged by 24% last year, and the benchmark stock index has advanced another 0.6% this year to trade near an all-time high. Yet several experts have warned the market is headed for disaster, as several recession indicators are flashing red, overseas conflicts threaten to disrupt growth, and stubbornly high inflation could forestall interest-rate cuts.

Against that backdrop, Gross advised investors to take part in the market but stay away from the riskiest assets.

“I’m being careful,” he said. “You should too, no matter how great Nvidia looks.”

Read the original article on Business Insider
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January 12, 2024