New York Times sues OpenAI and Microsoft: “billions of dollars in damages”

New York Times sues OpenAI and Microsoft: “billions of dollars in damages”

The New York Times (NYT) has sued OpenAI and Microsoft for copyright infringement. According to the news organization, both companies have unlawfully used models trained on millions of NYT articles.

The Times has no specific payout in mind, but argues that OpenAI and Microsoft should be held responsible for “billions of dollars in statutory and actual damages.” Consultant and journalist Richard Tofel argued in conversation with NYT that a decision on this by the Supreme Court is inevitable.

No AI deal, but one was considered

Unlike news organizations Axel Springer and the Associated Press, NYT is not opting for a deal to sell access to its articles to OpenAI or Microsoft. Such a collaboration did seem possible at one point, but an “amicable resolution” could not be reached after The Times knocked on Microsoft and OpenAI’s door in April.

OpenAI had gratefully used Internet resources to develop earlier AI models, but it was not until ChatGPT, powered by GPT-3, that a product of this company reached a wider audience. The AI company’s data collection and processing did not go unmentioned for long. In February 2023, a few months after ChatGPT stunned the world, experts began questioning whether this AI solution treated copyright correctly.

Microsoft pumped billions into OpenAI and secured the rights to use that company’s models for its own commercial purposes. The end result is an ecosystem of Copilots, from Word assistance to Android apps. Although Microsoft’s own Prometheus model is also working behind the scenes, the tech giant could not have developed it’s AI solutions without OpenAI’s GPT models. For that reason, the lawsuit could have major implications for the entire offerings of both OpenAI and Microsoft.

Revamp revenue model

It remains to be seen how the U.S. Supreme Court positions itself. European regulations also restrict how companies like OpenAI and Microsoft should deal with copyrights. The former already seems to have realized that it cannot continue its current practices, given that its deals with AP and Axel Springer are mutually beneficial.

NYT stresses that the revenue model of journalism is at stake. Because Microsoft Copilot (formerly Bing Chat) can serve up news, such AI solutions could be seen as a new competitor against conventional news organizations. Controversy has surrounded Google News for years, as that service also aggregates news and can drive down visitor numbers by already presenting content generated by other sources. However, the knife cuts both ways: Google News is also a giant driver of web traffic. The same can apply to AI news feeds, with Microsoft Copilot (originally Bing Chat) already providing hyperlinks to relevant articles since its introduction date.