But these tools have raised serious legal questions about the copyright protection for the assets that these AI models are trained on.

That has resulted in numerous lawsuits being filed by individual artists, Hollywood studios, and media companies, who all assert that some of the most popular AI systems are trained on unauthorized images and videos. Ongoing litigation includes Disney and Universal suing image generation tool Midjourney, the New York Times squaring up against ChatGPT owner OpenAI and Microsoft, and the Wall Street Journal and New York Post versus AI startup Perplexity.

Ely Greenfield, chief technology officer at software maker Adobe’s digital media business, has spent over two years pitching a different path. Ever since the debut of a text-to-image model known as Firefly in March 2023, Adobe has touted the company’s own creative generative AI models that are only trained on content that it has rights to use, including Adobe Stock photos and licensed artistic content.

Firefly’s models have been integrated in Adobe’s suite of apps including Photoshop and Illustrator, and thus far, businesses and individual creators have generated over 26 billion assets. Big names including toy maker Mattel and cosmetics manufacturer Estée Lauder have signed on to Firefly for creative ideation, editing, and asset generation purposes.

“Every piece of content that we train on is something that we have acquired the license of, or that is published under a verifiable and known license,” says Greenfield.

This approach does come with some limitations. If Firefly were asked to generate an image of a Disney cartoon character, like say Mickey Mouse, “it would do a horrible job of it,” concedes Greenfield. “And that’s by design and on purpose.”

Greenfield says that AI tools based on every image found on the internet produce less desired outputs, not just for potentially infringing on IP, but because it is representative of a vast trove of data that doesn’t always have the best quality. “There’s the raw science of how you build the model, but a massive amount of work goes into data curation and preparation,” says Greenfield. “The average piece of content on the internet isn’t necessarily what you want to put in your ad.” 

Adobe’s buttoned-up AI approach means the company’s off-the-shelf Firefly offering would have little use to a consumer-facing company like Coca-Cola. But under an enterprise licensing agreement, Adobe says it can train a private version of Firefly that’s exclusively trained on the beverage company’s branding and style.

Since Firefly’s launch, Adobe has had to make some modifications to the images in the company’s asset bank. Early on, generative AI wasn’t great at producing clear images of hands, so Adobe had to reach out to the photographers it works with to get more licensed pictures of hands to train the AI properly.

All Firefly content also goes through a moderation process that includes a mix of human and computer oversight, eliminating harmful images, but also those that may contain sensitive IP. A photographer may have exclusive license to an image that they produced, but if there’s a trademark asset like a Nike Swoosh or Starbucks Siren logo, Adobe will nix the image.

Adobe has lauded the proliferation of Firefly, reporting in the most recent second fiscal quarter ending May 30 that traffic to the Firefly App grew 30% from the prior quarter, with paid subscriptions nearly doubling over the same period.

More recently, Adobe has integrated image and video models from OpenAI, Google, Pika Luma AI, and Runway into the company’s Firefly app. 

This runs parallel with the public’s shifting views on the ethical uses of AI, as well as some recent court decisions that AI hyperscalers have won. Anthropic, in one example, saw a ruling go its way last month that said the company could train models using published books without consent from the authors. To be sure, it will be years before the courts resolve these thorny legal matters, and the right use of images, text, and audio assets will almost certainly vary across the globe.

For Adobe, Greenfield says pulling in these partnership models reflected an evolution to how creative professionals are working with AI today. He says that customers want access to a wide variety of AI models, especially as these technologies quickly advance. This is similar to the multi-modal approach most CTOs and chief information officers have embraced when deploying AI coding tools for software developers or the application of other uses of AI in marketing, legal, and communications to improve worker productivity. 

Adobe has added content credentials to make it clear to marketers when the assets they are creating are safe to use for commercial production (with Firefly) versus for ideation purposes (the external partner models). Customers have the final say on what path works best for them.

“We have a lot of customers who have different opinions on when to use different types of models and how they feel about commercial safety,” says Greenfield. “A lot of them feel that in ideation, they’re open to using anything.”

John Kell

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Fortune recently unveiled a new ongoing series, Fortune AIQ, dedicated to navigating AI’s real-world impact. Our third collection of stories explores how businesses across virtually every industry are putting AI to work—and how their particular field is changing as a result.

• How Walmart, Amazon, and other retail giants are using AI to reinvent the supply chain—from warehouse to checkout. Read more
• Meet the legacy players and upstarts using AI to reinvent the energy business. Read more
• AI isn’t just entering law offices—it’s challenging the entire legal playbook. Read more
• How a bulldozer, crane, and excavator rental company is using AI to save 3,000 hours per week. Read more
• AI is already touching nearly every corner of the medical field. Read more

NEWS PACKETS

More than 25 companies changed their IT leaders in the last three months. CIO Dive reports on the annual trend of technology leaders being reshuffled at large employers including Home Depot, McDonald’s, Best Buy, and Unum Group, a trend that the trade outlet attributes, in part, to the rapid pace of change in technology innovation. AI tends to come up frequently in these corporate announcements touting a new IT executive hire. Two Fortune 500 companies that announced new IT leaders over the past week, Southern Company and State Street, each highlighted oversight of AI as a key responsibility for these new executives.

ChatGPT’s growth continues to soar. The popular AI chatbot developed by AI hyperscaler OpenAI disclosed it has received 2.5 billion daily prompts from users, including about 330 million from users in the U.S., and up sharply from when CEO Sam Altman disclosed that users sent over 1 billion daily queries in December. News outlets pitted the usage figures against those from Google’s parent company Alphabet, which says the search engine receives 5 trillion queries annually, averaging just under 14 billion daily. That scorching hot growth comes as ChatGPT has faced some troubling headlines over the past week, including reports of outages that affected paying users this week and a report from The Wall Street Journal that linked conversations with ChatGPT to the manic episode of a user that’s on the autism spectrum. Separately, WSJ also reported on the scaled back plans for the $500 billion Stargate joint venture by OpenAI and SoftBank. 

Microsoft warns of vulnerability affecting SharePoint. Microsoft quickly moved to issue an emergency fix to close off a vulnerability affecting the company’s SharePoint product, while also warning businesses and governments of active attacks on the popular collaboration software platform. “Anybody who’s got a hosted SharePoint server has got a problem,” said Adam Meyers, senior vice president with CrowdStrike, a cybersecurity firm, in an interview with the Associated Press. “It’s a significant vulnerability.” Over the weekend, Microsoft reported that the attacks (some say they came from China) had applied only to on-premises SharePoint services, not those in the cloud like Microsoft 365. The vulnerability was concerning because it can allow hackers to impersonate users or services even after the SharePoint server is patched, CNBC reported, citing the insights from cybersecurity firm Eye Security, which said it first identified the flaw.

Meta declines to sign EU’s AI Code of Practice. Facebook’s parent company Meta says it won’t sign the code of practice for Europe’s new laws governing AI, claiming the guidelines “introduces a number of legal uncertainties for model developers, as well as measures which go far beyond the scope of the AI Act.” Bloomberg reports that the European Union published the code of practice earlier this month, a voluntary framework that is intended to help corporations put processes in place to adhere to the AI Act, which was signed into law last August with provisions that were to go into effect over the course of three years. AI providers like Meta who don’t sign the code “will have to demonstrate other means of compliance,” according to the commission’s spokesperson, and as a consequence they “may be exposed to more regulatory scrutiny.” Separately, a group of European companies—including Airbus and Mistral AI—have asked the EU to suspend the AI Act’s implementation for two years as they clamor for a regulatory posture that would be more hands off and friendly to innovation.

ADOPTION CURVE

The majority of business leaders anticipate building quantum into their workflows. A survey of 400 business leaders found that eight out of ten organizations believe they have reached the limit of benefits that can be achieved to optimize logistics, scheduling, and design running on classic computers, and with that in mind, 53% are planning to build quantum computing into their workflows and 27% are considering to do so. 

The study also found that 46% of the surveyed leaders project that within two years, they’ll see a return on investments between $1 million to $5 million from quantum optimization, with 27% predicting a return of more than $5 million in the first 12 months. The findings by Wakefield Research, backed by quantum computing company D-Wave Quantum, comes as pioneering work on quantum computers is still in the research and development phase, but has also seen a wave of technological advancements from the likes of IBM, Google, Amazon, and Microsoft.

Courtesy of D-Wave Quantum

JOBS RADAR

Hiring:

– The Commonwealth of Massachusetts is seeking a CIO, based in Boston. Posted salary range: $145K-$165K/year.

– M&T Bank is seeking a CIO for the consumer and business banking unit, based in Buffalo, New York. Posted salary range: $157.5K-$292.5K/year.

– Chanel is seeking a head of technology, based in New York City. Posted salary range: $248.6K-$300K/year.

– Ruiz Foods is seeking an IT director of development, operations and security, based in Frisco, Texas. Posted salary range: $160K-$200K/year.

Hired:

– Southern Company (No. 161 on the Fortune 500) appointed Hans Brown as EVP and chief information technology officer, effective July 31, to oversee the gas and electric utility company’s technology strategy and digital transformation efforts. Previously, Brown held several leadership roles at financial services provider BNY, including as a CIO of the corporate trust and depositary receipts business.

– State Street (No. 198 on the Fortune 500) has selected Andrew Zitney to serve as CIO, moving the executive from the CTO role, a role he has held at the financial services company since 2020. Prior to joining State Street, Zitney served as a CTO of enterprise platforms, strategy, and architecture at pharmaceuticals distributor McKesson and held technology leadership roles at Allstate, PayPal, and JPMorganChase.

– Kohl’s (No. 261 on the Fortune 500) announced Arianne Parisi to serve as the department store retailer’s chief digital officer. In this role, Parisi will steer the company’s omnichannel experience, including Kohls.com and the Kohl’s app. Most recently, Parisi served as CDO at retailer JD Sports Fashion and also held leadership roles at retailers The Finish Line and Nordstrom.

Every Friday morning, the weekly Fortune 500 Power Moves column tracks Fortune 500 companies C-suite shifts—see the most recent edition.

– GreyOrange named Saurabh Gupta as CTO, where he will steer the warehouse robotics company’s global product and engineering teams. Previously, Gupta held executive roles at Apple, where he led software development for multiple generations of iPods and the first iPhone, and worked in the consumer robotics research group at Amazon. He also served as CTO of robotics company Wonder Workshop.

– Check Point Software Technologies appointed Jonathan Zanger as CTO, joining the cybersecurity provider after serving as CTO at software provider Trigo, where he led the development of advanced AI and computer vision for retailers.

– Hamilton Insurance Group announced the appointment of Raymond Karrenbauer as CIO, effective September 15. Karrenbauer joins Hamilton from the Cybersecurity Maturity Model Certification Accreditation Body, which supports the Defense Department’s contractor cybersecurity compliance program. He had served as CFO at that organization since 2021.

– HireRight named Lars Ewe as CTO, effective immediately, where he will oversee the global technology teams for the background screening company. Prior to joining HireRight, Ewe served as the CTO at agriculture data and insights provider DTN. He has also previously held leadership positions at Anaconda, Evariant, and Click Security.

– Aledade appointed Lalith Vadlamannati as CTO, joining the healthcare company after most recently serving as CTO for the digital physical therapy company Hinge Health. Prior to that, he was a VP of engineering at Amazon.