Sell Data to AI Companies: Can It Be Recurring Income?
Sell Data to AI Companies: Can It Be Recurring Income?
A company receives one payment from an AI lab for its data.
Then the owner starts to wonder whether another payment is coming.
So when you sell data to AI companies, can it be recurring income?
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Sell Data to AI Companies: Can It Be Recurring Income?
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A company receives one payment from an AI lab for its data.
Then the owner starts to wonder whether another payment is coming.
So when you sell data to AI companies, can it be recurring income?
Many owners think a second payment arrives on its own, but a first data deal is usually 1 payment.
Some deals do pay again, and which kind you get depends on the kind of data and the contract.
This is general information, not legal advice.
So first, the 4 ways an AI lab can pay.
An AI lab can pay in 4 shapes.
A one-time license is a single payment for the data you deliver.
A yearly refresh pays again each year, when you deliver an updated set.
Some deals pay an upfront payment first, and then a share of what the lab earns later.
Others pay by the month, based on the hours of work the lab approves.
So why is the first shape the most common?
Old data does not change, so most deals end after one payment.
Take a company that delivers 9 years of support tickets.
Those 9 years are complete, so the AI lab holds the whole set.
Next month, there is nothing new to sell.
Old emails and old project files work the same way.
So what kind of data can pay again?
A deal can repeat when the data keeps growing.
A support team adds new tickets every month, and a design team adds new project files.
Each month the pile gets bigger.
So a refresh, which is a new delivery of what was added, can be worth buying.
The AI lab decides whether to buy it, so a refresh is never guaranteed.
Another way to be paid again is a revenue share.
It is a share of what the AI lab earns from the data.
It often comes with an upfront payment, because the share can be small.
It is also uncertain, since it depends on how well the product built with your data sells.
So ask 2 questions: how is it measured, and how is it reported to you?
Without clear answers, you cannot check what you are paid.
If you want repeat payments, the contract has to say 3 things.
First, how long the license lasts.
Second, whether it renews, and who decides.
Third, the price of a refresh, written down before you deliver the first set.
A promise on a call or in an email does not count, unless it is in the contract.
These details are agreed case by case.
Not every company will get repeat payments, because old data does not grow.
So do not build a budget on income that is not in the contract.
If the contract says one payment, plan for one payment.
Any later payment is a pleasant surprise, not part of the plan.
Here is a checklist of questions about repeat payments.
First, does your data keep growing?
How long does the license last, and does it renew?
What is the price of a refresh?
If there is a revenue share, how is it measured and reported?
Is every payment written in the contract?
After a list like this, your next question is probably, who can help me negotiate this?
I can help with that, so let me introduce myself.
I'm Jimmy. I have worked in data at Fortune 500 companies, as a data analyst, a data engineer and a software engineer, and I am trained in data science. I am also a Canadian military veteran, specialized in data analysis and reporting.
In a data deal, I come in as your broker and technical advisor.
As your broker, I help you create relationships with AI labs and bring back their offers, so you can compare the price and the terms before you decide.
I work through the terms with you, and you make the final call.
As your technical advisor, I guide your team through what to export, the format, the de-identification and compliance.
We move forward only after your team signs off.
I work on commission only, paid by the AI lab.
Already shopping your data around? Contact us anyway. We can still work through the terms with you and help you negotiate a better price.
If you are buying data for an AI lab, I find the right data and see it through to delivery, so you can focus on AI research.
So ask about the second payment before you sign the first one.
More on licensing your data at AITrainingDataBroker.com.
Thank you for watching.
I will see you next time.