Academic publishers are quickly entering into licensing agreements with artificial intelligence (AI) companies to create a new revenue stream in light of reduced US research funding.

Informa Plc's Taylor & Francis inked a US$10 million deal with Microsoft Corp. in 2024, granting the tech giant access to a portion of its library for training large language models (LLMs).

Bloomsbury Publishing Plc aims to monetize academic content through AI partnerships, as indicated in its recent financial results. John Wiley & Sons Inc. also announced collaborations with Amazon Web Services and Perplexity earlier this year.

These deals are proving to be lucrative for publishing giants. Informa generated US$75 million in non-recurring data access sales in 2024 through its Microsoft partnership, boosting Taylor & Francis' revenue growth from 3% to 15%. Excluding AI agreements, organic growth would have been around 3.5%, according to Berenberg analyst William Larwood.

This move could help offset the impact of reduced federal spending on academic research by the US government, with Taylor & Francis facing potential revenue risks due to funding cuts. A 43% budget cut to the National Institutes of Health could result in a significant revenue decline for the publisher.

Even publishers not currently engaging in licensing agreements are leveraging AI internally. Springer Nature AG & Co KGaA, for example, is using AI to streamline workflows and enhance the publication process.

The recent surge in AI licensing deals in the academic sector reflects a broader trend of publishers collaborating with powerful AI companies while also safeguarding their content.

Compensation remains a contentious issue in these AI deals, with some authors feeling they are not adequately rewarded for their licensed work. Publishers are striving to strike a balance between AI advancements and fair compensation for content creators.

Despite concerns about becoming obsolete in an AI-driven world, publishers are optimistic about the future and are implementing strategies to protect their intellectual property rights in AI partnerships.