Diversity Photos Founder Loses Arbitration Battle Over Adobe AI Training Use

Gerald Carter built Diversity Photos from the ground up with a specific mission: fill a real gap in stock photography by creating authentic images of minority communities, recruiting everyday people, and securing proper consent for every shot. Adobe turned that archive into AI training data for Firefly, and when Carter pushed back, the company's legal machinery ground him down through years of procedural fights that ended in a lost arbitration.

Carter told PetaPixel that Adobe "fed every single image from Diversity Photos into its Firefly AI image model." After he protested, Adobe offered what Carter described as a "paltry" fee for the AI training use. He rejected it. What followed was a protracted communications breakdown: calls and emails went unanswered, and Carter says he was given the runaround. In January 2024, his attorney sent a formal demand letter. Adobe's response was to point to the original partnership agreement, asserting that it gave the company the right to do whatever it wanted with the Diversity Photos archive.

Carter and his attorney filed for arbitration in June 2024. Even getting to that stage required a second filing, because Carter's side had to formally demonstrate they could not afford arbitration costs and invoke Adobe's own contractual language requiring Adobe to cover those fees if the other party couldn't pay. Adobe, according to Carter, didn't budge. "Adobe's strategy was to litigate every step," Carter told PetaPixel. "So, we had to file a second time to prove we cannot afford arbitration and that Adobe's terms say they will pay if we cannot afford it."

Before the arbitration reached its conclusion, Adobe had already moved for summary judgment in the litigation. The court granted that motion in full except for a single claim: negligence. That surviving claim centered on Adobe allegedly posting the Diversity Photos archive online without watermarks or copyright management information, which Carter argued allowed other AI companies including Midjourney, Stability AI, and Google to train on the library without any compensation to Diversity Photos. Even that claim ultimately didn't go Carter's way.

Carter described the arbitration process as stacked against him from the beginning. He lost. Adobe is now seeking to confirm the arbitration award, and according to PetaPixel, the company is positioning that ruling as precedent for future disputes with other rights-holders. Adobe also sent a process server to Carter's home during the course of the conflict, a detail that underscores how aggressively the company pursued the legal proceedings.

For photographers and stock library operators watching this space, the case raises a pointed question about what partnership agreements signed before the generative AI boom actually authorize. Adobe's position throughout was that its original contract with Diversity Photos covered AI training use entirely. Carter never got a ruling that said otherwise.