22 Oct Wall Street Journal and New York Times Sue Perplexity AI Over ‘Massive Freeriding’ on Third-Party Content

Updated on October 22, 2024 by David Lalire

In a significant legal development, the Wall Street Journal parent company Dow Jones and the New York Post have filed a lawsuit against Perplexity AI, a generative AI search engine, accusing the startup of widespread copyright infringement.

According to the suit, Perplexity AI has allegedly been copying and using copyrighted content from major publishers, including articles from News Corp outlets, to generate user query responses. The publishers argue that this practice siphons traffic from their websites, threatening their revenue models based on advertising and subscriptions.

The complaint, filed in the Southern District of New York, highlights the startup’s so-called “freeriding” on valuable journalistic content. It cites examples where Perplexity allegedly reproduced entire articles, such as a New York Post piece about a writer’s experience at Shea Stadium, and added fabricated details to responses based on Wall Street Journal articles. These actions, the publishers claim, not only violate copyright law but also mislead users through “hallucinations” of false information generated by the AI.

The lawsuit underscores the growing tension between traditional media companies and AI startups that utilize news content to train their models and deliver real-time responses. Reuters reports that Perplexity has been accused of building an internal database using vast amounts of copyrighted content through a method known as retrieval-augmented generation (RAG). This technology enables AI systems to produce answers that at times replicate entire sections of original articles.

The lawsuit follows similar actions taken by media organizations like the New York Times, which recently sent Perplexity a cease-and-desist letter. Publishers are increasingly concerned that AI platforms are undermining the value of their content by substituting the need to visit original sources. In response to such concerns, some companies, like OpenAI, have sought licensing deals with publishers. News Corp itself has previously signed a $250 million deal with OpenAI to license its content.

While Perplexity has not yet responded to the lawsuit, it has attracted significant investor interest, reportedly in talks to raise over $500 million in new funding, according to The Wall Street Journal.

The lawsuit marks another key moment in the battle between AI innovators and content creators, as publishers seek to protect their intellectual property from what they see as unauthorized use by generative AI systems.

For further details, see the following sources:

• Wall Street Journal, October 21, 2024
• Reuters, October 21, 2024

Photo by Philip Strong, Unsplash