The landscape of artificial intelligence is rapidly evolving and with it, the rules governing how AI systems access and use data. Recently, India has stepped into the spotlight with a bold regulatory proposal that could significantly impact how AI giants like OpenAI and Google train their cutting-edge models. Under the new framework, these companies may soon have to pay royalties to use copyrighted works for AI training, a change that could reshape the balance between innovation, data rights, and fair compensation.
What India Is Proposing
A committee under the Department for Promotion of Industry and Internal Trade has recommended introducing a mandatory blanket license for AI developers. Under this license, any content that is lawfully accessed but is copyright-protected can only be used for training AI models once the developer’s pay royalties to a newly formed central body representing content creators and rights holders.
The proposed central body, called the Copyright Royalties Collective for AI Training, would collect payments from AI firms and distribute them to authors, musicians, news publishers, and other copyright holders. The idea is to ensure that creators are properly compensated when their works are used in AI training.
Importantly, this model rejects voluntary licensing or ad hoc agreements between AI firms and content owners. The committee argues that individual negotiations lead to high transaction costs, uneven compensation, and disadvantages for smaller creators. A blanket licence ensures broad, non-discriminatory access while safeguarding rights holders’ remuneration.
Why This Matters: Stakes for Google and OpenAI
Companies like Google and OpenAI have long operated under the assumption that publicly available content can be used for training AI models, a stance that aligns with fair use arguments common in other markets.
If India’s proposal becomes law, the economics of AI development could change drastically. AI firms operating in India, a massive and growing market, might need to factor in royalty payments, potentially increasing their costs, shifting business strategies, or altering how they access global training datasets.
Moreover, India’s move may set a precedent. Other countries might watch closely, especially creators and publishers globally who have long expressed concerns about AI models being trained on copyrighted material without compensation or acknowledgement.
What the Copyright Holders Want
Rights holders in India, including authors, news agencies, and publishers, have repeatedly raised concerns about AI companies using their works without permission or compensation. Critics argue that AI firms benefit from free access to high-quality content, while creators and publishers receive no compensation, even as AI companies monetize the outputs through subscriptions, enterprise deals, or integration into products.
The proposed royalty model aims to correct this imbalance. By establishing a centralized, government-backed licensing regime, the plan aims to ensure fair remuneration and avoid a torrent of individual lawsuits or licensing negotiations that could be chaotic, expensive, and unfair to smaller creators.
Industry Pushback and Concerns
Not everyone is welcoming this proposal with open arms. Some in the tech industry warn that mandatory royalties or blanket licensing may stifle innovation and raise barriers to entry for smaller startups. Critics argue that a one-size-fits-all royalty regime is unprecedented and may discourage investment in AI research and development.
Furthermore, global norms around AI training vary widely. In many countries, AI developers rely on public data and fair use doctrines to access training material. India’s proposal diverges sharply from such norms, raising questions about whether more restrictive licensing regimes could fragment the global AI development ecosystem.
What’s Next: Public Feedback and Legal Uncertainty
The committee has opened the proposal for public consultation. Stakeholders, including tech firms, content creators, publishers, civil society, and the broader public, have 30 days to provide feedback. After this period, the government may finalize the framework.
Given the potential impact on business models, content industries, and global AI research, the next few months may see intense debate, negotiations, and perhaps revisions to the proposal. The final shape of the law could influence not just India’s AI future, but how other nations regulate AI training globally.
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