In a move that is set to reshape the stock image industry, Getty Images has announced plans to merge with its rival Shutterstock in a cash-and-stock deal valued at $3.7 billion. The combined entity, which will retain the Getty Images name, is expected to be a dominant player in the market, offering a vast library of stock photos and video footage to customers.

Both Getty Images and Shutterstock provide licensed content to a wide range of customers, including news organizations, film and documentary makers, ad agencies, and marketing firms. The merger will bring together two of the largest players in the industry, with Getty Images shareholders set to own approximately 54.7% of the new entity and Shutterstock shareholders owning 45.3%. Getty Images also owns the iStock and Unsplash brands, further expanding its reach.

As part of the deal, Shutterstock shareholders will have the option to receive $28.80 per share in cash, 13.67 shares of Getty Images, or a mix of both. The merger is expected to be completed in the coming months, pending regulatory approval.

The timing of the merger is significant, as the stock image industry is on the cusp of a major transformation driven by artificial intelligence (AI). AI represents both an opportunity and a threat to the industry, as companies like Getty Images can license their content to AI firms to train next-generation models. At the same time, customers may opt to use generative AI tools to create images and videos that fit their needs, potentially disrupting the traditional stock image business model.

Getty Images CEO Craig Peters hailed the merger as "exciting and transformational" for the companies, unlocking opportunities to strengthen their financial foundation and invest in the future. The deal is expected to enhance content offerings, expand event coverage, and deliver new technologies to better serve customers.

However, the merger is likely to draw antitrust scrutiny, particularly in the wake of the incoming Trump Administration's stance on big tech deals. It remains to be seen how regulators will approach this deal, which could have significant implications for the industry as a whole.

The merger marks a significant shift in the stock image industry, which is poised to undergo a period of rapid change driven by technological advancements. As the industry continues to evolve, it will be interesting to watch how Getty Images and Shutterstock navigate the challenges and opportunities presented by AI and other emerging technologies.