Dow Jones sues AI startup Perplexity over copyright infringement

AI startup faces legal challenge over copyright infringement: News Corp subsidiaries Dow Jones & Co. and the New York Post have filed a lawsuit against Perplexity, an AI-powered information discovery platform, alleging massive copyright infringement of their content.

The lawsuit’s core allegations: Perplexity is accused of illegally copying copyrighted works from publishers and diverting readers and revenue away from the original content creators.

• The plaintiffs claim Perplexity’s “Skip the Links” feature allows users to access information without visiting the original publishers’ websites, potentially harming their business models.
• Dow Jones and the New York Post assert they attempted to address the issue with Perplexity in July 2024, offering to discuss a potential licensing deal, but received no response.

Broader context of AI and copyright disputes: This lawsuit is part of a growing trend of media companies taking legal action against AI companies over alleged copyright infringement.

• The New York Times recently sent Perplexity a cease-and-desist notice and has sued OpenAI and Microsoft over similar copyright concerns.
• These legal actions highlight the ongoing tension between AI companies’ use of copyrighted material for training and content generation and publishers’ efforts to protect their intellectual property.

Perplexity’s market position and valuation: Despite the legal challenges, Perplexity appears to be in a strong financial position.

• The Wall Street Journal reported that Perplexity is seeking to raise around $500 million, potentially doubling its valuation to about $8 billion.
• This fundraising effort suggests that investors remain confident in Perplexity’s business model and growth potential, even as it faces legal scrutiny.

Legal remedies sought: The lawsuit filed by Dow Jones and the New York Post outlines specific actions and compensation they are seeking from Perplexity.

• The plaintiffs are requesting an injunction to stop Perplexity from unauthorized copying of their copyrighted content.
• They are also seeking statutory damages of up to $150,000 per infringement, as well as actual damages and Perplexity’s profits derived from the alleged infringements.

News Corp’s stance on AI and intellectual property: Robert Thomson, CEO of News Corp, issued a statement emphasizing the company’s position on AI companies’ use of copyrighted material.

• Thomson accused Perplexity of willfully copying copyrighted material without compensation and presenting it as a substitute for the original source.
• He contrasted Perplexity’s approach with that of OpenAI, with whom News Corp has a licensing agreement potentially worth over $250 million over five years.
• Thomson indicated that News Corp is open to working with “principled” AI companies but will vigorously pursue legal action against those it believes are abusing intellectual property.

Implications for the AI industry: This lawsuit, along with similar actions by other media companies, could have significant ramifications for the AI industry and its use of copyrighted material.

• The outcome of these legal battles may shape how AI companies access and use published content for training and information retrieval purposes.
• It may also influence future licensing agreements between AI companies and content creators, potentially establishing new norms for compensating publishers whose work is used in AI systems.

Analyzing deeper: The legal challenges faced by Perplexity and other AI companies highlight the complex intersection of technological innovation, intellectual property rights, and the evolving media landscape. As AI continues to advance, finding a balance between fostering innovation and protecting content creators’ rights will likely remain a critical issue for both the tech and media industries.