Perplexity AI, a generative AI company backed by Amazon founder Jeff Bezos, is facing multiple copyright infringement lawsuits from major media houses like the Wall Street Journal, New York Post, etc. Let’s explore the key details around these ongoing legal battles.
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Lawsuit by The Wall Street Journal and New York Post
In October 2024, the Wall Street Journal and New York Post, both owned by News Corp, filed a federal lawsuit against Perplexity AI in the Southern District of New York. Some important points from this lawsuit:
- News Corp accused Perplexity of illegally copying large amounts of content from WSJ and NY Post without permission or payments to power its AI system known as an “answer engine”.
- This allegedly allowed Perplexity to directly compete for readers while also free-riding on the publisher’s copyrighted content and diverting traffic away.
- News Corp sent Perplexity a notice in July 2024 about these issues but the company did not respond to discuss a potential licensing deal.
- The lawsuit is demanding that Perplexity ceases using their content, destroys databases with the content, and pays damages up to $150,000 per infringement.
Allegations in the Lawsuit
The lawsuit presented examples where Perplexity’s AI system had generated entire news articles from the NY Post and WSJ in response to user queries. It alleged that Perplexity was effectively acting as a substitute for the original news sources through its AI outputs. The lawsuit also accused Perplexity of damaging the publishers’ brands by falsely attributing false or fabricated information to their publications through some of the AI system’s answers.
The plaintiffs, News Corp, which owns NY Post and WSJ, sought damages and injunctions against further copyright violations by Perplexity. News Corp highlighted that its journalists invest significant efforts to produce high-quality content, and undermining the financial incentive could harm the news industry.
New York Times Sends Cease-and-Desist
In a similar move, the New York Times sent Perplexity a cease-and-desist notice in October 2024, asking it to stop accessing and using NYT copyrighted content through its systems. While not an official lawsuit yet, this indicates NYT is considering legal action as well.
Other Publisher Lawsuits
Reports suggest other publishers like CNBC and Forbes had accused Perplexity of illegally copying their content in the past without permission or payments. This indicates a growing concern among media groups about the unauthorized use of their copyrighted works by AI systems.
Perplexity AI’s Response
Perplexity responded to the lawsuits on its company blog. It said it was disappointed by the “adversarial” lawsuits as collaborating with publishers should have been the preferred approach. Perplexity claimed the allegations made in the lawsuits mischaracterized how its AI system works. It stated the system is not designed to directly republish full copyrighted articles. The company also denied ignoring earlier communications from plaintiffs.
Perplexity argued that facts reported by news publishers must be freely available information for public use without restrictions or payments. However, it expressed a willingness to collaborate with publishers through revenue-sharing deals like what it has with some other outlets. News Corp said Perplexity ignored requests to discuss a potential deal for WSJ and NY Post content.
Perplexity AI Funding and Business
Perplexity is backed by major investors like Amazon founder Jeff Bezos. The lawsuit alleged that despite earlier communications, Perplexity did not bother to negotiate a potential licensing or revenue-sharing deal with News Corp. Reports mention Perplexity has ambitious fundraising plans valuing the company at over $8 billion. However, copyright lawsuits pose challenges and regulatory uncertainties for Perplexity’s business model, which relies on vast amounts of publicly available text data, including news content.
Implications of the Lawsuit
If the court sides with News Corp and other publishers, it could set an important precedent around using copyrighted media content to train AI without explicit permission. However, a ruling in Perplexity’s favour may make such uses more commonplace. Regardless, licensing agreements between content producers and AI companies will likely continue evolving.
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