| Welcome to Bw Reads, our weekend newsletter featuring one great magazine story from Bloomberg Businessweek. Today, Vauhini Vara writes about the genre fiction publisher Inkitt, how it's using artificial intelligence to expand its library and what that might mean for human writers. You can find the whole story online here. If you like what you see, tell your friends! Sign up here. Manjari Sharma hadn't written much when she decided to start a novel. She'd graduated from university during the Covid-19 pandemic and was reading romance stories to quell her restlessness while locked down in her parents' house in Lucknow, India. One day she settled into bed and started typing one of her own. Sometimes in the months that followed, her parents would drift into the yellow-walled bedroom where she liked to work, and she'd scoot over so they could get on the bed and watch the epic series Mahabharat on TV. They knew she was writing but didn't know the details. Sharma—whose pleasure reading had made her an expert on American romance—was drafting a novel that started with an overweight, insecure American high schooler named Keily being tormented by a hot football player. ("'You're fat and dumb,' James had said with a condescending smirk, 'like a pig. I should call you Piggy.'") It would end with them falling in love. Sharma started publishing installments of the novel on Wattpad's free platform, titling it Fat Keily; after it was done, seven months later, she also put it on another free platform called Inkitt, based in Berlin. In both places, the novel attracted lots of readers and rapturous comments—"Punctuation be damned! I absolutely love this story!"—and before long, Inkitt was proposing that she move the novel from its free platform to its premium subscription-based platform, Galatea, where Sharma would receive a share of sales. She agreed, and her novel, renamed Keily, took off again. In early 2024 she learned Inkitt wanted to turn it into a series. This time there was a catch. Sharma recalls being told that she was welcome to write the next books if she could get them done within a few weeks. Otherwise, Inkitt would hire a ghostwriter to do it, though her name would still be on the cover and she'd still get royalty payments.  Sharma with one of the Keily books in New Delhi. Photograph by Ruhani Kaur for Bloomberg Businessweek Sharma had no real choice; her contract with Inkitt gave it the right to do just about anything it wanted with Keily, including come up with sequels. Plus, her life had gotten busy in the years since she first drafted the novel. She'd gotten a master's degree in mathematics and started an internship in artificial intelligence at the Royal Bank of Scotland. She accepted the ghostwriting offer. The second and third books came out on Galatea in close succession a few years after the first. This time, some readers were underwhelmed. "IMO it is poorly written, has a different vibe completely, and just doesn't go in any direction that I would have expected," one person commented. The criticism bothered Sharma, who read the sequels only after they were published, but she appreciated the extra money. Soon, Inkitt told her it was adapting Keily for a new video app called GalateaTV; again, no work would be required, and she'd still collect royalties. The launch of that series in September 2024—there were 49 episodes, each no more than a couple of minutes long, meant to be watched on a phone screen—brought in even more income. By then, Sharma was working full time for the bank, but the Keily money was starting to outpace her generous salary. "Keily was just a fun lockdown project with no big publishing aspirations," she told me over Zoom one morning last fall. Its success had been "a wonderful surprise." For Inkitt, this was a manifestation of its vision, a decade in the making, to use technology to discover unknown authors and turn their creative output into revenue. The platform began in the mid-2010s as a friendly place for anyone to share their writing. Over the years, though, its ambitions expanded as it bet that technology could help it extract significant value from a catchy narrative premise—especially with the advent of AI technologies that could generate text and images. On the company's free platform, Inkitt, amateur writers still share their stories: lots of romance, often spiced with werewolves, vampires or billionaires. The company offers to publish the most successful stories on Galatea, which costs $69.99 for an annual subscription. From there, Inkitt can create sequels and spinoffs, while also adapting stories for other formats such as GalateaTV (also $69.99 a year), with or without the author's involvement. For some popular novels, including the Keily series, it also produces print editions. Writers receive a small share of the revenue attributed to their stories. For most, it's well below what they'd make with a traditional publisher, but then, finding a traditional publisher requires connections that Inkitt authors tend not to have. Sharma understood that Inkitt chose titles for Galatea by relying on in-house software that tracked readership metrics. What she didn't fully grasp when Inkitt began serializing Keily was that its employees were using large language models—AI technologies trained on human-authored text and capable of generating their own—in the writing and editing process. Since then, AI has only become more prominent at Inkitt, to the point that staff is "heavily using AI to iterate on the stories," Chief Executive Officer Ali Albazaz said in an interview. Inkitt relies on AI for tasks such as copyediting manuscripts and suggesting plot developments, as well as producing translations, audiobook narration and covers. Freelancers hired to edit and ghostwrite novels also aren't barred from using LLMs for their text. All of that allows Inkitt to employ remarkably few editorial employees (whom it prefers to call "content" employees): Galatea's catalog of titles from some 400 authors is overseen by just one head of editorial and five "story intelligence analysts," plus the stable of freelancers. "AI makes it possible not only for everyone to access the inner author within but to also democratize the publishing process," Vinod Khosla, the founder of Khosla Ventures, wrote on social media last summer, sharing an Inkitt post. At the time, established authors were growing furious about the use of their work to train LLMs and expressing concern that these models threatened their livelihoods. But Khosla is well known for his all-in bullishness on AI: His investment firm was one of OpenAI's first funders, and his grand statements about AI's potential to replace human labor have been known to go viral. (He once predicted that 80% of the work in 80% of jobs could someday be performed by AI—doctors, farmworkers, assembly line workers—"and mostly, AI will do the job better and more consistently!") Not long before Khosla shared that post about Inkitt, his firm had led a $37 million round of Series C funding for the company; according to people familiar with the deal who requested anonymity because its details were supposed to be confidential, the round valued the company at about $300 million. Inkitt's investors also include other major Silicon Valley venture capital firms such as Kleiner Perkins and New Enterprise Associates Inc., along with high-profile figures in traditional media and publishing, including Michael Lynton, the former CEO of Sony Entertainment and Penguin Group, and Stefan von Holtzbrinck, the CEO and co-owner of Holtzbrinck Publishing Group, the parent of Macmillan Publishers. Jane Friedman, the former CEO of HarperCollins Publishers Worldwide, is an adviser. What these supporters have in common, to varying degrees, is an interest in the company's tech-centric vision for the $151 billion global book publishing market. "There will be new types of publishers and Inkitt is likely going to be one of them," Khosla said in an email. Even some traditional players are cautiously opening up to AI. Holtzbrinck Publishing Group has funded an AI startup called Chaptr. The world's biggest and second-biggest consumer publishers, Penguin Random House and HarperCollins Publishers, have made internal versions of ChatGPT available to their employees for brainstorming and other purposes, though neither company has used it to produce or edit text in books. (Penguin Random House's Pantheon imprint is the publisher of my book Searches.) While Penguin Random House doesn't allow AI companies to use its authors' books to train their models, HarperCollins struck a deal last year with an unnamed technology company to provide text for that purpose if the authors give permission and receive compensation. HarperCollins CEO Brian Murray has also mused about the prospect of a "talking book" that could let readers converse with the AI-driven replica of an author. For even these tentative explorations, the publishers have been widely lambasted by authors, including some they've published. But Inkitt's CEO, Albazaz, doesn't seem to worry much about what established authors think of him or his platform. His business model doesn't need them. Keep reading: The Romance Publisher Dreaming of an AI-Driven Dynasty |
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