In a significant development in the ongoing battle between traditional media and artificial intelligence (AI), News Corp, the parent company of Dow Jones and the New York Post, has launched legal action against Perplexity, an AI firm backed by Amazon founder Jeff Bezos. The lawsuit, filed on Monday, alleges that Perplexity has been using copyrighted material from their publications without authorization, thereby training its AI model to provide answers to user queries that directly compete with their own content. This, according to News Corp, constitutes a significant breach of copyright and undermines their revenue streams.
News Corp claims that Perplexity’s business model relies on ‘massive freeriding’ on their protected content, essentially using their work for free while simultaneously attracting the same audience and potentially depriving them of valuable advertising revenue. The lawsuit highlights the growing tension between established media companies and AI startups that are rapidly disrupting the information landscape.
This legal action comes on the heels of a similar cease-and-desist letter sent to Perplexity by The New York Times last week, which also accused the AI company of using its content for training without permission. The Times, in a separate lawsuit filed last year, also took legal action against OpenAI, the developer of ChatGPT, for copyright infringement, alleging that the company had used its reporting without authorization.
Interestingly, News Corp has struck a significant deal with OpenAI earlier this year, licensing its news content for an estimated $250 million. This deal, however, appears to have not deterred the company from taking action against Perplexity. It is worth noting that Perplexity has seen its valuation triple in the past year and is currently seeking an $8 billion valuation in a new funding round. The company is also engaged in discussions with major brands like Nike Inc. and Marriott International, and is developing a ‘sponsored’ question system that aims to challenge Google’s dominant position in the advertising market.
This lawsuit against Perplexity underscores the growing debate surrounding AI and copyright infringement. As AI companies continue to develop increasingly sophisticated models capable of generating human-quality text and information, questions about the ethical and legal use of copyrighted material are becoming increasingly complex. The outcome of this lawsuit will have significant implications for the future of AI and its relationship with traditional media.