Exclusive: Sony Music backs AI rights startup Vermillio
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Vermillio, the Chicago-based AI licensing and protection platform, has raised a $16 million Series A co-led by DNS Capital and Sony Music, executives exclusively tell Axios
Why it matters: Sony Music's first investment in AI licensing seeks to protect its artists and support them in responsibly using generative AI tools.
How it works: Vermillio's TraceID tool monitors online content for use of intellectual property, as well as name, image and likeness. The platform can automatically send takedown requests and manage payments for licensed content.
- The company charges $4,000 per month for the software and takes a transaction fee for its licensing tool.
- Clients include movie studios like Sony Pictures, record labels like Sony Music, talent agencies like WME, and individual talent.
- With Sony Pictures, Vermillio let fans create AI-generated Spider-Verse characters. It partnered with The Orb and David Gilmour, alongside Sony Music and Legacy Recordings, on AI tools for creating tracks and artwork inspired by "Metallic Spheres In Colour."
Context: CEO Dan Neely has worked in AI for more than 20 years. The serial entrepreneur sold his last startup, Networked Insights, to American Family Insurance in 2017 and founded Vermillio in 2019.
- He says he was inspired to build the "guardrails for generative internet" after seeing the release of deepfake creation software, DeepFaceLab, and rapper Jay-Z's efforts to take down a deepfake of himself.
Flashback: Prior, Vermillio raised $7.5 million in seed funding from angel investors.
- Dennis Kooker, president, global digital business at Sony Music Entertainment, says he was introduced to Neely about a year and a half ago and was impressed by his knowledge and the startup's strategy.
- "The first project we did together was a proof of concept with David Gilmour and The Orb to show and highlight that intellectual property and generative AI can work hand in hand," Kooker says. "Training the right way, ethically and principally, can be accomplished."
Zoom out: Some companies like Sony Music are seeking legal action on cases where generative AI impacts the core of IP companies. These companies want to protect and monetize creators and content along with nearly every other aspect of their businesses.
- Sony Music, along with Universal Music Group and Warner Records, sued AI startups Suno and Udio for copyright infringement.
- But content companies also want to embrace these technologies. Artists can use the tech for their own content creation and for fan engagement.
What's next: Neely says Vermillio plans to expand to sports and work with major sports leagues this year. It's also releasing a free version of the product that shows whether someone is at high or low risk of AI copyright.
