Getty Images reaches "display agreement" with OpenAI, stock price soars 141% pre-market

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Getty Images announced on Monday that it has signed a "display agreement" with OpenAI. Following the news, the company's shares soared by more than 140% in pre-market trading in New York, making it one of the most dramatic market reactions among recent AI content licensing waves.

Getty Images stated in a release on Sunday that images from its library will appear in ChatGPT's search and discovery features, providing users with richer and higher-quality, authentically licensed visual content. The companies did not disclose the financial terms of the agreement or whether Getty images would be used to train OpenAI's future models.

For Getty, whose share price has fallen about 55% this year and closed at just 61 cents, this news is undoubtedly a shot in the arm. This collaboration with OpenAI marks a major shift in Getty's attitude towards AI technology and is expected to restore investor confidence.

Behind the Stock Surge: Short Covering Magnifies Gains

Getty Images' pre-market gains once reached 200%, eventually settling around 141%. The sharp fluctuation in stock price is partly due to its high short interest ratio.

Data shows that around 17% of Getty's freely traded shares are in short position, with about 4.6 days needed for shorts to cover. The positive news forced shorts to cover, further amplifying the stock price increase.

Since the beginning of the year, Getty's share price has been under pressure, mainly because the market fears that AI developers such as OpenAI will erode its traditional image licensing business—AI can now generate highly realistic images, posing a direct threat to the business model of stock photo libraries.

From Confrontation to Cooperation

Teaming up with OpenAI represents a significant shift in Getty's position towards the AI industry. Getty had previously resisted AI technology, not only trying to develop its own AI image generator but also filing a lawsuit against another popular AI tool developer, Stability AI.

Now, the two sides have chosen to cooperate. In the press release, Getty stated, "This agreement allows for the display of Getty Images' content within ChatGPT to enhance the quality of visual responses."

Getty CEO Craig Peters said: "High-quality, authentically licensed visual content makes AI-driven search and discovery more useful and trustworthy. This collaboration with OpenAI reflects our mutual recognition of this and will jointly bring ChatGPT users a richer visual experience."

OpenAI's Licensing Empire Continues to Expand

This agreement with Getty is the latest move in a series of content licensing deals recently secured by OpenAI.

As ChatGPT's creator expands into areas such as video production and advertising, OpenAI has signed licensing deals with multiple news publishers and media companies.

Analysts believe that OpenAI's cooperation with Getty shows that the chatbot company is gradually replacing its previous model of relying on web scraping and its related legal disputes with paid licensing, content attribution, and direct integration with publishers.

Fundamental Pressures Persist, Acquisition Approval Still Pending

Although market sentiment has clearly improved due to the news of the cooperation, Getty's fundamental challenges cannot be ignored. In May of this year, Getty's reported first-quarter sales missed market expectations.

In addition, Getty's $3.7 billion acquisition of rival Shutterstock is still awaiting regulatory approval, and the uncertainties around the merger remain another variable hanging over the company.

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