Publisher Implements Mass Layoffs Following Partnership with AI Technology Provider OpenAI

Layoffs and the Dark Side of OpenAI‘s Partnership with Dotdash Meredith

A leaked memo from media giant Dotdash Meredith has revealed that the company will be laying off 143 people, approximately 4 percent of its workforce. This comes on the heels of a smaller layoff in November 2024, where 53 media workers lost their jobs at the company.

The OpenAI Deal: A Partnership with Uncertain Consequences

The layoffs wouldn’t be so notable in a scarred and barren post-COVID media landscape, save for Dotdash’s massive “strategic partnership” with OpenAI in the spring of 2024. The deal is set to lavish Dotdash with at least $16 million in annual revenue, or at least until the AI bubble bursts. In exchange, OpenAI gets to plug “trusted content” — articles written by humans, presumably, though Meredith was involved in a hazy dalliance with an AI company prior to its acquisition by Dotdash.

A Partnership Built on Uncertainty

As part of the agreement, OpenAI will display content and links attributed to Dotdash Meredith in relevant ChatGPT responses. OpenAI will also collaborate with Dotdash Meredith to create new AI products and features for its readers and use historical and ongoing DDM content to enhance its model’s performance.

“This partnership delivers the best, most relevant content right to the heart of ChatGPT,” reads a Dotdash press release announcing the deal. For its trouble, Dotdash will see a vague “technological investment” into its targeted ad-platform D/Cipher, which will enable the AI platform to spam slop to “something like 30 million more URLs or somewhere in that neighborhood.”

The Human Cost of OpenAI‘s Partnership

When asked to follow up on what this means for web users and how D/Cipher will be deployed across the open web, Dotdash Chief Innovation Officer Jon Roberts said: “That’s our special sauce. We’re not ready to talk about it yet.” In light of this huge round of layoffs and ChatGPT‘s untrustworthy performance, we must ask the question — who does this “special sauce” serve?

Certainly not the 176 media workers who are now out of a job, nor for users who are inundated with mountains of AI schlok at every turn. The answer? Stakeholders! Who doesn’t love to see those guys winning?

The Financial Benefits of OpenAI’s Partnership

In the three fiscal quarters since announcing the partnership, IAC’s licensing revenue has skyrocketed, as the OpenAI money furnace floods the media conglomerate in cash. “If you look at Q3 of 2024… licensing revenue was up about $4.1 million year-over-year,” said Christopher Halpin, EVP, CFO & COO of IAC Inc. “The lion’s share of that would be driven by the OpenAI license.”

A Growing Concern: The Future of AI and Journalism

In the face of a growing AI-pocalypse which workers and consumers are powerless to stop, corporations like IAC have some pretty important questions to answer. How does OpenAI recoup its costs in this scenario? What happens to your licensing revenue stream when or if the well runs dry? How many more layoffs does Dotdash plan to reward their workforce with in exchange for their “help” training OpenAI’s LLMs? And who will be left holding the bag when the whole bubble bursts — the media workers who’ve made the company what it is today, or C-Suite terminators who hoard 3-letter titles like ChatGPT hoards personal data?