Updated Apr 30, 2024 - Business

Major U.S. newspapers sue OpenAI, Microsoft for copyright infringement

Illustration of a gavel hovering over the openai logo

Illustration: Natalie Peeples/Axios

Eight prominent U.S. newspapers owned by investment giant Alden Global Capital are suing OpenAI and Microsoft for copyright infringement, in a complaint filed Tuesday in the Southern District of New York.

Why it matters: On top of a similar case filed by the New York Times against both companies, the new suits add heft to publishers' claims.

Between the lines: Until now, the Times was the only major newspaper to take legal action against AI firms for copyright infringement.

  • Many other news publishers, including the Financial Times, the Associated Press and Axel Springer, have instead opted to strike paid deals with AI companies for millions of dollars annually, undermining the Times' argument that it should be compensated billions of dollars in damages.
  • Microsoft declined a request for comment. Axios has also reached out to OpenAI for comment.

Zoom in: The lawsuit is being filed on behalf of some of the most prominent regional daily newspapers in the Alden portfolio: the New York Daily News, Chicago Tribune, Orlando Sentinel, South Florida Sun Sentinel, San Jose Mercury News, Denver Post, Orange County Register and St. Paul Pioneer Press.

  • The newspapers are being represented by Rothwell, Figg, Ernst & Manbeck, one of the two law firms supporting the New York Times in its complaint against OpenAI and Microsoft.
  • The lawsuit was filed in the same district as the Times' lawsuit. If the same judge is chosen to oversee both cases, they could choose to combine the two complaints.
  • A source familiar with the Alden subsidiaries that own the newspapers, MediaNews Group and Tribune Publishing, said that the papers opted to sue the two firms instead of attempting to negotiate a deal. (The Times tried to negotiate a deal with OpenAI and Microsoft for months leading up to their suit, which OpenAI said caught it by surprise.)
  • For now, the source said, Alden isn't ruling out having more of its more than 60 daily papers eventually join the lawsuit.

How it works: Similar to the Times' lawsuit, the heart of the new complaint centers on copyright infringement claims around the use of articles to train AI models.

  • The newspapers accuse OpenAI and Microsoft of "purloining millions of the Publishers' copyrighted articles without permission and without payment" to fuel the commercialization of their two main generative artificial intelligence products — OpenAI's ChatGPT and Microsoft's Copilot.
  • The newspapers also claim OpenAI and Microsoft removed copyright management information, like journalists' names and titles, from their work when the information they reported was cited in answers to queries.
  • The lawsuit also includes diluted trademark claims, which allege that OpenAI and Microsoft engaged in the unauthorized use of the newspapers' trademarks in branding the answers from ChatGPT and Copilot.

The intrigue: The newspapers also accuse the two AI giants of reputational damage pertaining to generative AI's "hallucinations," or made-up answers to users' queries.

  • They cite an example where, in response to a specific query, ChatGPT fabricated that the Denver Post published research and medical observations that smoking can be a cure for asthma.
  • A similar problem occurred when a specific query resulted in a GenAI answer that the Chicago Tribune recommended a recalled baby lounger that was linked to newborn deaths. (The Tribune never made such a recommendation.)

The big picture: The outcome of these lawsuits could fundamentally shift the way news companies are compensated for their work in the AI era.

  • News publishers have relied on ad revenue from search results for two decades. Generative AI tools could wipe out much of that traffic.
  • Text-based news companies are especially vulnerable to AI firms scraping their content and using it for free to train their models because most of their archives are available online and paywalls have proven insufficient in blocking data crawlers.

For now, many news companies are opting to strike deals with AI firms.

  • That's in part because of the difficult business environment for media publishers.
  • It's also because they are eager to begin experimenting with ways generative AI can improve their operations.

What to watch: OpenAI has already contested the Times' complaints. The company says that instances the Times cited in which OpenAI tools regurgitated verbatim copies of Times reporting without attribution and permission were "a rare bug that we are working to drive to zero."

Editor's note: This story has been updated with additional details.

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