Case Study: Contracting Terms of Use for AI-Generated Art Using DALL-E

There is a popular saying that goes, “a picture is worth a thousand words.” 

In recent years, a group of engineers at the California-based research lab, OpenAI, have revolutionized this expression with their innovation of DALL-E and its successor, DALLE-2 (“DALL-E”). In November 2022, OpenAI released DALL-E in beta as an application programming interface (“API”), allowing developers to integrate DALL-E into their products. This article describes DALL-E and some core contracting considerations for lawyers advising clients who leverage the technology.

What Is DALL-E?

DALL-E is an artificial intelligence system that is trained to generate, manipulate, and re-arrange images derived from natural language prompts. DALL-E incorporates a dataset of text-image pairs with over 12 billion parameters (i.e., the number of input data that can be transformed into output data) to compose art that is so sophisticated, it can look as though a human created or photographed it (see “DALL-E Demo” example from DALL-E’s website).

The idea of AI-generated art is not new. Much has been written about how Canadian legislators can account for these disruptive technologies.

These questions are still relevant, but the unique capabilities inherent in DALL-E are worth highlighting, not only from a statutory, but also a contracting perspective, especially now that DALL-E has been released in API form.

DALL-E Demo: An output generated by the input, “teddy bears shopping for groceries in ancient Egypt.”