A federal appeals court ruled that art created autonomously by artificial intelligence cannot be copyrighted, saying that at least initial human authorship is required for a copyright.

The ruling Tuesday upheld a decision by the U.S. Copyright Office denying computer scientist Stephen Thaler a copyright for the painting “A Recent Entrance to Paradise.”

The picture was created by Thaler’s AI platform, the “Creativity Machine.”

The “Copyright Office’s longstanding rule requiring a human author … does not prohibit copyrighting work that was made by or with the assistance of artificial intelligence,” a three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia said in its unanimous ruling.

“The rule requires only that the author of that work be a human being — the person who created, operated, or use artificial intelligence — and not the machine itself,” the panel said.

The panel noted that the Copyright Office “has allowed the registration of works made by human authors who use artificial intelligence.”

Copyright grants intellectual property protection to original works, giving their owners exclusive rights to reproduce the works, sell the works, rent them and display them.

Tuesday’s ruling hinged on the fact that Thaler listed the “Creativity Machine” as the sole “author” of “A Recent Entrance to Paradise” when he submitted a registration application to the Copyright Office in 2018.

Thaler listed himself as the picture’s owner in the application.

Thaler told CNBC in an interview that the Creativity Machine created the painting “on its own” in 2012.

The machine “learned cumulatively, and I was the parent, and I was basically tutoring it,” Thaler said.

“It actually generated [the painting] on its own as it mediated,” said Thaler.

He said his AI machines are “sentients” and “self-determining.”

Thaler’s lawyer, Ryan Abbott, told CNBC in an interview said, “We do strongly disagree with the appeals court decision and plan to appeal it.”

Abbott said he would first ask the full judicial lineup of the Circuit Court of Appeals to rehear the case. If that appeal is unsuccessful, Abbott could ask the U.S. Supreme Court to consider the issue.

The attorney said the case detailed “the first publicized rejection” by the Copyright Office “on the basis” of the claim that a work was created by AI.

That denial and the subsequent court rulings in the office’s favor, “creates a huge shadow on the creative community” he said, because “it’s not clear where the line is” delineating when a work created by or with the help of AI will be denied a copyright.

Despite the ruling, Abbott said he “was very pleased to see that the case has been successful in drawing public attention to these very important public policy issues.”

The Copyright Office first denied Thaler’s application in August 2019, saying, “We cannot register this work because it lacks the human authorship necessary to support a copyright claim.”

“According to your application this work was ’created autonomously by machine,” the office said at the time.

The office cited an 1884 ruling by the Supreme Court, which found that Congress had the right to extend copyright protection to a photograph, in that case one taken of the author Oscar Wilde.

The office later rejected two requests by Thaler for reconsideration of its decision.

After the second denial, in 2022, Thaler sued the office in U.S. District Court in Washington, D.C., seeking to reverse the decision.

District Court Judge Beryl Howell in August 2023 ruled in favor of the Copyright Office, writing, “Defendants are correct that human authorship is an essential part of a valid copyright claim.”

“Human authorship is a bedrock requirement of copyright,” Howell wrote.

Thaler then appealed Howell’s ruling to the D.C. Circuit Court of Appeals.

In its decision Tuesday, the appeals panel wrote, “This case presents a question made salient by recent advances in artificial intelligence: Can a non-human machine be an author under the Copyright Act of 1976?”

“The use of artificial intelligence to produce original work is rapidly increasing across industries and creative fields,” the decision noted.

“Who — or what — the ‘author’ of such work is a question that implicates important property rights undergirding growth and creative innovation.”

The ruling noted that Thaler had argued that the Copyright Office’s human authorship requirement “is unconstitutional and unsupported by either statute or case law.”

Thaler also “claimed that judicial opinions ‘from the Gilded Age’ could not settle the question of whether computer generated works are copyrightable today,” the ruling noted.

But the appeals panel said that “authors are at the center of the Copyright Act,” and that “traditional tools of statutory interpretation show that within the meaning of the Copyright Act, ‘author’ refers only to human beings.”

The panel said that the Copyright Office “formally adopted the human authorship requirement in 1973.”

That was six years after the office noted in its annual report to Congress that, “as computer technology develops and becomes more sophisticated, difficult questions of authorship are emerging.”

Abbott, the attorney who represented Thaler in the appeal, told CNBC that the Copyright Act “never says” that “you need a human author at all for a work … or a named author.”

Abbott noted that corporations are granted copyrights, as are authors who are anonymous or pseudonymous.

Protecting a ‘beautiful picture’

The Copyright Office, in a statement to CNBC, said it “believes the court reached the correct result, affirming the Office’s registration decision and confirming that human authorship is required for copyright.”

Thaler said that he will continue to pursue his bid for a copyright for the painting.

“My personal goal is not to preserve the feeling of machines,” Thaler said. “It’s more to preserve, how should I say, orphaned intellectual property.”

“A machine creates a beautiful picture? There should be some protection for it,” Thaler said.

As women’s sports surge in popularity, professional leagues are increasingly touting the value of female athletes. New professional leagues like SailGP are launching with the advantage of building from the ground up, with gender diversity as part of their DNA.

Noncontact and noncollision sports are leading the way. Formula 1′s F1 Academy has created a pipeline for women into motorsports, with a goal of increasing female participation and representation on and off the racetrack. At the same time, it’s drawing a more diverse fanbase. Roughly 41% of F1 fans now are female, with women aged 16 to 24 years old making up the fastest-growing fan group, according to Nielsen Sports.

Professional male and female athletes are already competing alongside and against each other in the United Pickleball Association’s unified league, the Global Mixed Gender Basketball league and in SailGP, the international sailing league co-founded by Oracle founder Larry Ellison and champion yachtsman Russell Coutts. 

Founded in 2018, the upstart sailing league involves 12 international teams racing on high-speed, 50-foot catamarans known as F50s. At speeds of more than 60 mph, SailGP is gaining a reputation as a sort of Formula 1 on the water.

“The whole goal is to train athletes to be capable of racing on an F50, which is one of the more complex boats in the world — maybe the most difficult boat to race in the world right now,” said Coutts, who is also SailGP’s chief executive officer. 

The league didn’t set out with gender equity goals in mind, Coutts said, but simply sought to create the most compelling competition.  

“We believe that male and female athletes can compete at the top of our sport against each other and with each other, so when we we saw that there was a difference in participation levels — and didn’t really see any logical reason for that — we took some steps to address that and we’ll take further steps in the future,” said Coutts. 

To bridge the experience gap most female sailors face, SailGP created programs to draw and train talent. In December, its Women’s Performance Camp in Dubai, United Arab Emirates, marked its largest on-the-water women’s athlete training camp to date. 

The league also requires each team to have at least one female athlete onboard during races and has set targets to have at least two female athletes per race crew in key positions within the next five years. Those key positions are the driver, who steers the boat; the strategist, who advises on tactics; the wing trimmer, who adjusts the 85- to 90-foot carbon-fiber wing sail; and the flight controller, who dictates how high or low the boat flies over the water.

The next SailGP races take place Saturday and Sunday in San Francisco, the second in back-to-back U.S. weekend races. 

SailGP has embedded inclusivity and sustainability into the competition via an Impact League that runs parallel to the on-the-water championship. Teams earn points for taking action to make sailing more accessible and to protect the environment in order to reach the podium. Winning teams earn cash prize donations to their partners. The Canadian team is in the lead in the Impact League thanks to its work to offer training opportunities, sailing camps and demo days to introduce foiling to new Canadian athletes.

“That changes the mindframe of very competitive people to care, and to compete, in a world of impact and sustainability as well,” said SailGP Chief Marketing Officer Leah Davis. “When you challenge the world’s most competitive people to be good at something else, they will turn their eyes to that pretty quickly, and in a pretty impactful way.”

Off the water, 43% of SailGP’s C-suite is female, up from just 14% in 2021. For comparison, 29% of C-suite roles at Fortune 500 companies are held by women, according to McKinsey’s Women in the Workplace 2024 report. The league last year introduced Apex Group’s accelerator program, aimed at increasing female representation at senior levels of the company. 

It has also introduced initiatives to train more women on the operations, technology and boat-building side of the business. For example, SailGP Technologies based in Southampton, U.K., offers an apprenticeship training scheme — eight participants join the program each year, four male and four female. Today, 33% of directors at SailGP and 52% of heads of departments are female.

The overall business strategy is helping to grow the league’s appeal to a new set of fans. For the first time in its history, more than half of the ticket holders in attendance at last season’s New Zealand Championships in March were female, a trend that has held steady this season.

“This demographic has been underserved in sports,” said SailGP Chief Purpose Officer Fiona Morgan. “A huge part of our headroom in fans is young fans — and actually they’re female fans — who probably didn’t think about sailing, but they like extreme sports or sustainability, or they like sports that have gender equity at the heart.”

In June, Tommy Hilfiger was announced as the United States SailGP team’s official lifestyle apparel partner, joining brands such as Red Bull, Emirates, Mubadala, Rockwool and Deutsche Bank in sponsoring individual teams. In November, SailGP announced it had signed Rolex as its first title sponsor.

“I don’t think many brands nowadays will go into sponsorship that doesn’t have diversity or equity at some point in it,” said Morgan. “Their consumers and their investors will ensure they do that.” 

In September, the league achieved a major milestone, announcing its first female driver. Two-time Olympic sailing champion Martine Grael joined for the 2024-25 season to skipper the new Mubadala Brazil SailGP Team, making history and immediately climbing the leaderboard. 

After championships in Dubai, Auckland, New Zealand, Sydney and Los Angeles, teams from the UK, Australia and New Zealand are leading the league. Grael has steered her team ahead of the Germany SailGP team, and is proving competitive against the more experienced United States team.

“In the past — and still nowadays — you see a lot of people say, ‘Girls shouldn’t do that,’” Grael said. Her response is to call out that old way of thinking: “Shouldn’t do what?”

Grael credits much of her early success to familiarizing herself with the boats using SailGP’s simulator, developing muscle memory before even getting on the water. Unlike traditional boats built with male sailors in mind, SailGP’s modern foiling boats open opportunities for women in roles that do not require as much physical strength, she said. Knowing when to push a button and developing a good feel for the boat are equally important to the more physical functions, said Grael. 

“Some guys have failed to understand that a girl is very much capable of doing the same role they’re doing,” she said.

Grael is among a number of top female athletes competing in key positions in SailGP — including Emirates Great Britain Team’s strategist Hannah Mills and the U.S. team’s Anna Weis — and says though women are still in the minority, things are changing.

Together with women competing in marquee races — like Switzerland’s Justine Mettraux, who took eighth place in the Vendée Globe single-handed, nonstop, nonassisted round-the-world race this year — they are carving a path for a new cohort of women to gain opportunities and make their mark.

“We have been less limited — I grew up never being told I shouldn’t do something,” said Grael. “There’s a big generation of others looking at us, and they’re going to come out strong.”

Swedish fintech firm Klarna will be the exclusive provider of buy now, pay later loans for Walmart, taking a coveted partnership away from rival Affirm, CNBC has learned.

Klarna, which just disclosed its intention to go public in the U.S., will provide loans to Walmart customers in stores and online through the retailer’s majority-owned fintech startup OnePay, according to people with knowledge of the situation who declined to be identified speaking about the partnership.

OnePay, which updated its brand name from One this month, will handle the user experience via its app, while Klarna will make underwriting decisions for loans ranging from three months to 36 months in length, and with annual interest rates from 10% to 36%, said the people.

The new product will be launched in the coming weeks and will be scaled to all Walmart channels by the holiday season, likely leaving it the retailer’s only buy now, pay later option by year-end.

The move heightens the rivalry between Affirm and Klarna, two of the world’s biggest BNPL players, just as Klarna is set to go public. Although both companies claim to offer a better alternative for borrowers than credit cards, Affirm is more U.S.-centric and has been public since 2021, while Klarna’s network is more global.

Shares of Affirm fell 13% in morning trading Monday.

The deal comes at an opportune time for Klarna as it readies one of the year’s most highly anticipated initial public offerings. After a dearth of big tech listings in the U.S. since 2021, the Klarna IPO will be a key test for the industry. The firm’s private market valuation has been a roller coaster: It soared to $46 billion in 2021, then crashed by 85% the next year amid the broader decline of high-flying fintech firms.

CEO Sebastian Siemiatkowski has worked to improve Klarna’s prospects, including touting its use of generative artificial intelligence to slash expenses and headcount. The company returned to profitability in 2023, and its valuation is now roughly $15 billion, according to analysts, nearly matching the public market value of Affirm.

The OnePay deal is a “game changer” for Klarna, Siemiatkowski said in a release confirming the pact.

“Millions of people in the U.S. shop at Walmart every day — and now they can shop smarter with OnePay installment loans powered by Klarna,” he said. “We look forward to helping redefine checkout at the world’s largest retailer — both online and in stores.”

As part of the deal, OnePay can take a position in Klarna. In its F-1 filing, Klarna said it entered into a “commercial agreement with a global partner” in which it is giving warrants to purchase more than 15 million shares for an average price of $34 each. OnePay is the partner, people with knowledge of the deal confirmed.

For Affirm, the move is likely to be seen as a blow at a time when tech stocks are particularly vulnerable. Run by CEO Max Levchin, a PayPal co-founder, the company’s stock has surged and fallen since its 2021 IPO. The lender’s shares have dipped 18% this year before Monday.

Affirm executives frequently mention their partnerships with big merchants as a key driver of purchase volumes and customer acquisition. In November, Affirm’s chief revenue officer, Wayne Pommen, referred to Walmart and other tie-ups including those with Amazon, Shopify and Target as its “crown jewel partnerships.”

An Affirm spokesman had this statement: “We win business when merchants want superior performance and maximum value, given our underwriting and capital markets advantages. We will continue our long-term strategy of competing on our products and entering into sustainable partnerships.”

The deal is no less consequential to Walmart’s OnePay, which has surged to a $2.5 billion pre-money valuation just two years after rolling out a suite of products to its customers.

The startup now has more than 3 million active customers and is generating revenue at an annual run rate of more than $200 million.

As part of its push to penetrate areas adjacent to its core business, Walmart executives have touted OnePay’s potential to become a one-stop shop for Americans underserved by traditional banks.

Walmart is the world’s largest retailer and says it has 255 million weekly customers, giving the startup — which is a separate company backed by Walmart and Ribbit Capital — a key advantage in acquiring new customers.

Last year, the Walmart-backed fintech began offering BNPL loans in the aisles and on checkout pages of Walmart, CNBC reported at the time. That led to speculation that it would ultimately displace Affirm, which had been the exclusive provider for BNPL loans for Walmart since 2019.

OnePay’s move to partner with Klarna rather than going it alone shows the company saw an advantage in going with a seasoned, at-scale provider versus using its own solution.

OnePay’s push into consumer lending is expected to accelerate its conversion of Walmart customers into fintech app users. Cash-strapped consumers are increasingly relying on loans to meet their needs, and the installment loan is seen as a wedge to also offer users the banking, savings and payments features that OnePay has already built.

Americans held a record $1.21 trillion in credit card debt in the fourth quarter of last year, about $441 billion higher than balances in 2021, according to Federal Reserve Bank of New York data.

“It’s never been more important to give consumers simple and convenient ways to access fair credit at the point of sale,” said OnePay CEO Omer Ismail. “That’s especially true for the millions of people who turn to Walmart every week for everything.”

Next up is likely a OnePay-branded credit card offered with the help of a new banking partner after Walmart successfully exited its partnership with Capital One.

“We’re looking forward to going down this new path where not only can they provide installment credit … but also revolving credit,” Walmart CFO John David Rainey told investors in June.

— CNBC’s MacKenzie Sigalos and Melissa Repko contributed to this report.

LONDON — Artificial intelligence that can match humans at any task is still some way off — but it’s only a matter of time before it becomes a reality, according to the CEO of Google DeepMind.

Speaking at a briefing in DeepMind’s London offices on Monday, Demis Hassabis said that he thinks artificial general intelligence (AGI) — which is as smart or smarter than humans — will start to emerge in the next five or 10 years.

“I think today’s systems, they’re very passive, but there’s still a lot of things they can’t do. But I think over the next five to 10 years, a lot of those capabilities will start coming to the fore and we’ll start moving towards what we call artificial general intelligence,” Hassabis said.

Hassabis defined AGI as “a system that’s able to exhibit all the complicated capabilities that humans can.”

“We’re not quite there yet. These systems are very impressive at certain things. But there are other things they can’t do yet, and we’ve still got quite a lot of research work to go before that,” Hassabis said.

Hassabis isn’t alone in suggesting that it’ll take a while for AGI to appear. Last year, the CEO of Chinese tech giant Baidu Robin Li said he sees AGI is “more than 10 years away,” pushing back on excitable predictions from some of his peers about this breakthrough taking place in a much shorter timeframe.

Hassabis’ forecast pushes the timeline to reach AGI some way back compared to what his industry peers have been sketching out.

Dario Amodei, CEO of AI startup Anthropic, told CNBC at the World Economic Forum in Davos, Switzerland in January that he sees a form of AI that’s “better than almost all humans at almost all tasks” emerging in the “next two or three years.”

Other tech leaders see AGI arriving even sooner. Cisco’s Chief Product Officer Jeetu Patel thinks there’s a chance we could see an example of AGI emerge as soon as this year. “There’s three major phases” to AI, Patel told CNBC in an interview at the Mobile World Congress event in Barcelona earlier this month.

“There’s the basic AI that we’re all experience right now. Then there is artificial general intelligence, where the cognitive capabilities meet those of humans. Then there’s what they call superintelligence,” Patel said.

“I think you will see meaningful evidence of AGI being in play in 2025. We’re not talking about years away,” he added. “I think superintelligence is, at best, a few years out.”

Artificial super intelligence, or ASI, is expected to arrive after AGI and surpass human intelligence. However, “no one really knows” when such a breakthrough will happen, Hassabis said Monday.

Last year, Tesla CEO Elon Musk predicted that AGI would likely be available by 2026, while OpenAI CEO Sam Altman said such a system could be developed in the “reasonably close-ish future.”

Hassabis said that the main challenge with achieving artificial general intelligence is getting today’s AI systems to a point of understanding context from the real world.

While it’s been possible to develop systems that can break down problems and complete tasks autonomously in the realm of games — such as the complex strategy board game Go — bringing such a technology into the real world is proving harder.

“The question is, how fast can we generalize the planning ideas and agentic kind of behaviors, planning and reasoning, and then generalize that over to working in the real world, on top of things like world models — models that are able to understand the world around us,” Hassabis said.”

“And I think we’ve made good progress with the world models over the last couple of years,” he added. “So now the question is, what’s the best way to combine that with these planning algorithms?”

Hassabis and Thomas Kurian, CEO of Google’s cloud computing division, said that so-called “multi-agent” AI systems are a technological advancement that’s gaining a lot of traction behind the scenes.

Hassabis said lots of work is being done to get to this stage. One example he referred to is DeepMind’s work getting AI agents to figure out how to play the popular strategy game “Starcraft.”

“We’ve done a lot of work on that with things like Starcraft game in the past, where you have a society of agents, or a league of agents, and they could be competing, they could be cooperating,” DeepMind’s chief said.

“When you think about agent to agent communication, that’s what we’re also doing to allow an agent to express itself … What are your skills? What kind of tools do you use?” Kurian said.

“Those are all elements that you need to be able to ask an agent a question, and then once you have that interface, then other agents can communicate with it,” he added.

The Federal Trade Commission is going after an e-commerce company that allegedly took millions of dollars from consumers as part of a “passive income” scheme, which spun up Amazon storefronts on their behalf and promised “insane returns” that were higher than the stock market.

The FTC said Tuesday it filed a lawsuit against the company, called Click Profit; its co-founders Craig Emslie and Patrick McGeoghean; and two other business associates. It also asked a judge to bar the parties from doing business temporarily.

The case is the latest example of the FTC cracking down on e-commerce “automation” services. These companies launch and manage online storefronts on behalf of clients, who pay money for the services and the promise of earning tens of thousands of dollars in “passive income.” The companies often make extravagant claims about potential earnings and the use of artificial intelligence technology to guarantee profits. Despite their assurances, consumers frequently end up losing money.

Click Profit, which also operated under the names FBALaunch, Automation Industries and PortfolioLaunch, promised investors they would “build you a massively profitable e-commerce store from the ground up” by selling products on Amazon, Walmart and TikTok, according to the FTC.

The company charged consumers between $45,000 to $75,000 for the initial investment, plus an additional $10,000 or more to pay for inventory, the FTC alleged in its complaint, which was filed in the U.S. District Court for the Southern District of Florida. Click Profit took up to 35% of any profits from their customers’ stores, the complaint states.

The company claimed the business opportunity was “safe, secure and proven to generate wealth,” according to marketing materials referenced in the FTC’s complaint. They posted screenshots of purportedly successful Amazon storefronts, including one they claimed generated product sales of over $540,000 in one month.

Emslie often appeared in TikTok videos and other online ads to pitch prospective consumers. In one ad, he said that “the stock market, real estate or precious metals will never be able to offer you” the level of security offered through investing in Click Profit, according to the FTC’s complaint. Other TikTok videos show him appearing alongside an image of Warren Buffett while “fanning himself” with wads of cash, per the complaint.

Click Profit talked up its expertise by claiming it had product sourcing partnerships with legitimate brands, including Nike, Disney, Dell, Colgate and Marvel, the complaint alleges. It also claimed to have spent $5 million to build a “super computer” and other AI technologies to locate the “most profitable products,” claiming the super computer had generated “around $100 million in sales,” per the complaint.

The company even implied that investors’ online store could be bought out by venture capital firms connected with Click Profit “at a 3-6x multiple,” the FTC alleged.

“In reality, the highly touted AI technology and brand partnerships do not exist, and the promised earnings never materialize,” the FTC said in its complaint.

Amazon suspended or terminated about 95% of Click Profit’s stores after they violated Amazon’s seller policies, the FTC alleged. After accounting for Amazon’s fees, more than one-fifth of Click Profit’s stores on the platform earned no money at all, while another third earned less than $2,500 in gross lifetime sales, the FTC stated.

As a result, most consumers were unable to recoup their investments and “some are saddled with burdensome credit card debt and unsold products,” according to the FTC, which also said that Click Profit often refused to refund victims their investments and threatened them with legal action if they posted publicly about their experience.

One unnamed consumer mentioned in the lawsuit invested “his life’s savings” in Click Profit and was later terminated as a client “with nothing to show for his payments,” the complaint states. He posted a negative review online and was allegedly approached by Emslie’s attorney, who threatened to sue the consumer and “take everything he and his wife owned,” per the complaint.

The consumer took the reviews down, then asked Emslie whether he could receive a partial refund, according to the FTC.

“The attorney told the consumer that Emslie had responded, ‘F*** off,’” the FTC alleged.

Representatives for Emslie and Click Profit didn’t immediately respond to a request for comment.

The FTC alleges Click Profit violated the FTC Act, the Consumer Review Fairness Act and the Business Opportunity Rule. It seeks to permanently prohibit Click Profit from doing business, as well as monetary relief for the victims.