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The frontier has moved. Buying tech and AI is easy. Turning it into measurable performance is not. In our work with leading companies, these transformations deliver ~20% EBITDA uplift—but only when they focus on a few domains and change how the work gets done. In Rewired, we show how capabilities turn technology into repeatable, compounding value.

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“I came up with the idea, the name, recruited the key people, taught them everything I know, provided all the initial funding. It was specifically meant to be for a charity that did not benefit any individual person. I could have started it as a for-profit and I chose not to. I chose to make it something for the benefit of all humanity.”
—Elon Musk, speaking from the stand on day two of the Musk v. Altman trial. OpenAI’s counterargument: Musk only started caring when he created a competitor.

And now for the main event…

It may feel like forever, but it’s only been a few weeks since OpenAI declared that it was shutting down Sora, its A.I. video-generating social network, and terminated its billion-dollar licensing partnership with Disney. In the span of just a few months, Hollywood went from panicking about I.P. infringement and hiring lawyers to making peace with Sora, cutting deals with Sam Altman, and now… wondering what’s next.

But the sudden death of Sora doesn’t mean the industry’s A.I. problem has died, too. There are dozens, if not hundreds, of A.I. image-and-video-generation apps, with more popping up all the time. A few, like Luma and Runway, have raised hundreds of millions of dollars. And according to Luke Arrigoni, the C.E.O. of Loti, a digital-likeness-protection company, the executives running these startups are “completely disabused of the notion that they’re going to go to L.A. and sign people up [for licensing] one by one.” OpenAI tried, of course, by first partnering with Disney—perhaps the most protective I.P. guardian in Hollywood. But “in general, that has been a failed strategy,” he told me. “Not a single GenAI provider was successful at it.”

A MESSAGE FROM OUR SPONSOR

The frontier has moved. Buying tech and AI is easy. Turning it into measurable performance is not. In our work with leading companies, these transformations deliver ~20% EBITDA uplift—but only when they focus on a few domains and change how the work gets done. In Rewired, we show how capabilities turn technology into repeatable, compounding value.

Learn More

Instead, Arrigoni has spent the past year developing a licensing solution called Interchange, which he hopes will quickly become the industry standard. He described it as a sort of bridge between Hollywood and Silicon Valley—a final answer to a dizzying I.P. headache that has plagued both groups. “It’s a love letter to both sides,” he said. Now all he has to do is to succeed where everyone else has failed.

Loti, which Arrigoni co-founded in 2022, has been racing to build one of the largest takedown platforms on the planet. The company “eats the internet” every day, running dozens of machine learning algorithms to identify where its clients’ likenesses might have been used without their permission, and getting the platforms responsible to remove those images. Loti, which works with leading talent agencies including CAA and WME, already has about 20,000 celebrities in its system, Arrigoni told me. The next step, obviously, was to move beyond charging money to eradicate celebrity deepfakes and start taking a commission for authorizing their digital likeness.

Arrigoni described Interchange as the “plumbing” that will enable both Hollywood and Silicon Valley to move beyond their current cat-and-mouse takedown game to establishing a proactive permissions-based licensing regime. Celebrities get to set their licensing prices and terms, and tech platforms get protection from the lawsuits that are beginning to pile up. Just as importantly, Loti’s advanced filtering technology theoretically ensures these digital doppelgangers aren’t used for anything…untoward.

James Feldman, a managing partner at a major entertainment-law firm, and a member of Loti’s advisory board, described the new platform as an attempt to create a marketplace that doesn’t yet exist—and to enable a new kind of relationship between studios and audiences and brands. For people who have “some celebrity,” Feldman said, “they feel like, If there’s a way for me to be paid to make my name and fame available, and I can make sure that it’s never going to be used in porn or political videos or violence or endorsements, that’s something that I’m sort of interested in.”

The trouble with Sora, Feldman suggested, was the inflexible copyright guardrails that OpenAI was forced to put up after Hollywood freaked out. As a result, the audience that initially flocked to the app quickly got bored when one of the few living celebrities they could play with was Altman himself. “The idea of putting famous people in content that you're generating yourself is very exciting and attractive to people,” he said. “And it turns out that making content using generative A.I. is a lot less exciting and interesting when you’re just using fake, completely invented performers who are not famous.”

But the short-lived OpenAI–Disney licensing deal, announced in December, clearly evidenced some mutual interest in the business opportunity. It’s not just the studios, either; while many A-list celebrities won’t whitelist their likeness at any price, one talent representative told me there’s a “big chunk in the middle, of people who aren’t really working that much and would like to have another way to make some money from their fame.” Indeed, Chris Jacquemin, the head of strategy at WME, told me the agency has started working with Loti both to protect their likeness and to monetize it. “Our clients should be setting the rules,” he said. (Disclosure: WME represents Puck.)

Loti isn’t the first mover in this new economy. In 2024, CAA launched The CAA Vault, which also empowers clients to control and set permissions for their digital I.P. across the internet. Other licensing regimes are beginning to pop up, too; Moody Pines, which aims to provide a pipeline of licensed audio data to model providers, complete with revenue sharing for voice talent, is just getting off the ground, and Credtent has a pipeline of over a million licensed works specifically intended for worry-free A.I.-model training. But Arrigoni is hoping that Loti’s emphasis on enforcement will make it the market leader. Meanwhile, he told me, Loti is in conversation with all the major A.I. platforms about getting on board. “We're expecting a pretty big market saturation of this by the end of the year,” he said.

Of course, the legal questions surrounding copyright in the A.I. context are still being defined. Dr. Chris Mammen, a patent and I.P. expert, offered up the example of a digital doppelgänger that looks a lot like Tom Cruise, but isn’t. With generated image and video content, the lines between something that looks like someone else and something that’s directly infringing on that person’s likeness is even fuzzier. Then, of course, there’s the complicated distinction between an actor’s persona, which belongs to them, and a character they might have played, whose I.P. is owned by a studio. In other words, what’s the difference between Harrison Ford, Indiana Jones, Han Solo, and Paul, the psychiatrist on Shrinking? Could Ford license his likeness if he’s holding a ray gun, or wearing a fedora?

Arrigoni conceded that this is a “delicate thing right now.” And it goes further: SAG-AFTRA, for instance, is worried about a scenario where a user might, say, decide to generate an image of Keanu Reeves as Indiana Jones. Would Disney then owe Reeves a licensing fee? “It becomes very complicated, very quickly,” Arrigoni said. The key, he said, is working with the studios directly, so they can tell Loti which actors are allowed to play which characters, and what kind of iconography—i.e., a whip and a hat—cross the threshold between an actor and a copyrighted character.

In other words, there’s still a lot of work that needs to happen at the legal level before these sorts of issues are resolved—and the industry is just at the beginning of this adventure. “I don’t think we’re going to get a silver-bullet solution through legislature, courts, or private ordering anytime soon,” Mammen said. “There’s going to be a laboratory of experimentation, and some stuff’s going to work and some stuff’s not going to work, and it may be a while before it stabilizes.” Loti, for its part, is just hoping that it can bring Hollywood and Silicon Valley to the same table.

That’s all for today. I’ll see you next week.

Ian

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