News Corp sues AI search start-up for using content to train AI engine

News Corp is suing AI startup Perplexity for copyright infringement, claiming its AI-powered search service is trained on material published by the Wall Street Journal and New York Post.

The legal action follows on from a cease-and-desist notice served on Perplexity by the New York Times last week, which has also commenced legal action against OpenAI and Microsoft over similar copyright infringement claims.

Perplexity claims to provide up-to-date news and information enabling users to “skip the links” to publishers’ websites. The lawsuit claims that it is able to do this by using its AI to, effectively, illegally copy publishers’ copyrighted material, in the process diverting customers and their revenues away from the original sources.

The lawsuit accuses Perplexity of copying a wide range of material “on a massive scale”, including “copyrighted news content, analysis, and opinion as inputs into its internal databased. It then uses that copyrighted content to generate response to users’ queries that are intended to, and do act as, a substitute for news and other information websites”.

To provide its service, “Perplexity accesses and copies, without authorisation or remuneration, vast numbers of web pages containing copyrighted material, including from Plaintiffs’ web pages and third-party web pages containing Plaintiffs’ licensed copyrighted works,” the filing adds.

It then provides machine-generated reproductions of the copied work that, nevertheless, may still reproduce content exactly as originally published.

The filing adds that News Corp put Perplexity on notice in July 2024, but did not receive a response.

“Other AI companies have engaged with the Plaintiffs and other publishers, resulting in legitimate market-based licensing solutions,” the filing adds, indicating that News Corp is looking for a licensing agreement.

If a deal is not forthcoming, News Corp is seeking damages of up to $150,000 for each infringement.

In a statement, News Corp CEO Robert Thomson said: “Perplexity perpetrates an abuse of intellectual property that harms journalists, writers, publishers and News Corp… Perplexity has wilfully copied copious amounts of copyrighted material without compensation, and shamelessly presents repurposed material as a direct substitute for the original source. Perplexity proudly states that users can ‘skip the links’ – apparently, Perplexity wants to skip the cheque.”

News Corp is already receiving cheques from other generative AI organisations. In May 2024, News Corp and OpenAI signed a deal enabling OpenAI to use News Corp editorial in its gen-AI products and platforms. The company will be looking to strike a similar deal with Perplexity.

Perplexity is currently looking to raise approximately $500 million in new funding, which would value the start-up at $8 billion. However, the lawsuits it is facing will almost certainly put off potential investors until these are settled.