Jack Conte built Patreon specifically to help creators get paid. Now he's calling out AI companies for using the "fair use" excuse to train on artists' work without compensation - and his argument carries weight because he actually understands both sides.

Conte is a musician and a tech CEO. He knows how algorithms work and how creators struggle. When he says the AI industry's fair use defense is "bogus," it's not coming from ignorance or Luddism. It's coming from someone who sees the hypocrisy.

Here's the core of his argument, delivered at South by Southwest: AI companies claim fair use permits them to train models on creator work without payment. But these same companies simultaneously negotiate multimillion-dollar licensing deals with established media corporations.

"They do multimillion-dollar deals with rights holders and publishers like Disney, and Condé Nast, and Vox, and Warner Music," Conte said. Then he asked the obvious question: "If it's legal to just use it, why pay?"

That's the tell. The licensing deals prove these companies know intellectual property requires compensation. They're just choosing to recognize it only for entities with legal departments big enough to sue.

Individual creators - the millions of illustrators, musicians, and writers whose work trained GPT-4, Midjourney, Stable Diffusion - don't have that leverage. So AI companies take their work, claim fair use, and build billion-dollar businesses on it.

The fair use argument goes like this: training AI models is transformative use, like how search engines index the web. The output isn't copying; it's generating new content based on learned patterns. Therefore, no compensation required.

There are holes in this argument. Search engines show you where to find content and drive traffic to creators. AI models replace the need to hire creators in the first place. That's not the same thing.

More importantly, as Conte points out, the companies making this argument don't actually believe it. If they did, they wouldn't be paying . The legal theory exists to justify taking from people who can't fight back.