Getty Images stock drops after Perplexity AI partnership.

Getty Images (GETY) shares experienced a downturn, closing down over 6% on Friday, following the announcement of a multi-year licensing agreement with the AI-powered search engine, Perplexity AI. The deal, while seemingly beneficial for both parties, sparked investor concern perhaps due to the lack of immediate revenue impact details.

The core of the agreement will see Perplexity integrate Getty Images’ extensive library of creative and editorial content directly into its AI-driven search results. This allows Perplexity users to access high-quality imagery directly within the search experience. Furthermore, Perplexity has committed to enhancing the presentation of these images on its platform, including clear attribution and links back to the original Getty Images source – a move aimed at promoting transparency and acknowledging copyright.

“Partnerships such as this support AI platforms to increase the quality and accuracy of information delivered to consumers, ultimately building a more engaging and reliable experience,” stated Nick Unsworth, vice president of strategic development at Getty Images, highlighting the strategic rationale behind the collaboration. The enhanced image quality and attribution are expected to improve user trust in the AI-generated results delivered by Perplexity.

While the official release omits specific financial details, the agreement underscores a growing trend of collaboration between established media companies and emerging AI players. For Getty Images, this deal represents a strategic maneuver to monetize its valuable content in the age of AI-driven search. By licensing its imagery to Perplexity, Getty gains exposure to a new user base and potentially unlocks a new revenue stream. However, the market reaction suggests investors are looking for more concrete information on the financial implications of this type of agreement.

From Perplexity’s perspective, the partnership provides access to a vast and meticulously curated image library, crucial for enhancing the quality and authority of its AI-driven search results. The integration of Getty Images content could also differentiate Perplexity from competitors in the rapidly evolving AI search landscape. Analysts suggest deals like this are crucial for AI companies to avoid copyright infringement lawsuits and provide customers access to high quality content.

The long term impact of this partnership on Getty’s financials remains to be seen. The stock decline signals that the market’s perception of the deal is still uncertain, with investors likely seeking more clarity on the long-term financial benefits.