NYT sues OpenAI, Microsoft for copyright infringement

• The forthcoming legal battle could set a precedent for how courts define the value of news content in training large language models, and what the damages are for previous use.

The other side: "We respect the rights of content creators and owners and are committed to working with them to ensure they benefit from AI technology and new revenue models," an OpenAI spokesperson told Axios in a statement.

• "Our ongoing conversations with the New York Times have been productive and moving forward constructively, so we are surprised and disappointed with this development. We're hopeful that we will find a mutually beneficial way to work together, as we are doing with many other publishers."

Context: Other firms, such as German media giant Axel Springer and the Associated Press, have started to broker deals individually with artificial intelligence firms.

• Those arrangements include payments to news companies in exchange for the right to use their content to train AI large language models.
• Other sorts of copyright holders — including major music companies, authors and comedians — have also sued generative AI companies on similar grounds.

Details: The complaint filed Wednesday in the Southern District of New York alleges that OpenAI and Microsoft's "unlawful use of The Times's work to create artificial intelligence products that compete with it threatens The Times's ability to provide that service."

• The Times argues that while those firms "engaged in widescale copying from many sources," they placed "particular emphasis" on the Times’ content.
• "Defendants seek to free-ride on The Times's massive investment in its journalism by using it to build substitutive products without permission or payment," the lawsuit says.

How it works: The Times conducted an analysis of the latest available set of data on web crawlers used by AI companies to train their algorithms, according to the lawsuit.

• It inferred from that data that its content was likely used more than other widely available sets of content online to train AI large language models.

Be smart: The Times has not demanded a specific amount of damages, but in the lawsuit says it "seeks to hold them responsible for the billions of dollars in statutory and actual damages."

The big picture: The lawsuit marks a major turning point in the already contentious relationship between Big Tech firms and news companies.

• News publishers have spent the last decade lobbying Congress for protections from Big Tech firms that leveraged their content for social media and search engine engagement.
• The advent of AI has launched a new lobbying effort among news executives who argue tech firms don't have the right to scrape their content under the fair use parameters of current copyright law.
• Some news advocates fear that without proper guardrails, artificial intelligence companies could jeopardize the businesses of the news companies they are relying on to train their algorithms, creating an existential threat for both AI companies and newsrooms alike long-term.

The intrigue: Part of what makes the legal battle between news publishers and AI firms so complicated is that news companies still want to experiment with the new tech, even while fighting AI companies for protections.

• The Times, for example, hired an editorial director of artificial intelligence initiatives two weeks ago.

Microsoft did not immediately respond to a request for comment.

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Read the complaint below:

Editor's note: This story has been updated with additional context, details from the lawsuit and comment from OpenAI.