The New York Times has filed a lawsuit against the AI search startup Perplexity, accusing it of copyright infringement. This marks the second such legal action taken by The Times against an AI company, following its earlier suit against OpenAI and Microsoft. The core of The Times' complaint is that Perplexity's commercial products directly substitute for the outlet's content, utilizing it without proper permission or remuneration. The lawsuit highlights that Perplexity's retrieval-augmented generation (RAG) products, including its chatbots and Comet browser AI assistant, crawl websites and databases to generate responses for users, often providing verbatim or near-verbatim reproductions, summaries, or abridgments of copyrighted material, even content behind The Times' paywall. Furthermore, The Times alleges that Perplexity's search engine has 'hallucinated' information and falsely attributed it to the news organization, causing brand damage.

This legal action by The Times is part of a broader, years-long strategy by publishers to navigate the evolving AI landscape. Recognizing the inevitability of AI integration, media outlets are using lawsuits as a strategic tool to gain leverage in negotiations. Their goal is to compel AI companies to formally license content, thereby ensuring creators are compensated and the economic viability of original journalism is maintained. Perplexity has attempted to address these compensation demands by introducing a Publishers’ Program, offering a share of ad revenue to participating outlets such as Gannett and the Los Angeles Times. It also launched Comet Plus, allocating 80% of its monthly fee to publishers, and secured a multi-year licensing deal with Getty Images. Despite these initiatives, The Times asserts that Perplexity's unlicensed content usage remains unacceptable, a sentiment echoed by its spokesperson, Graham James.

The New York Times is not alone in its concerns. Several other media entities have raised issues with Perplexity's practices. The Chicago Tribune filed a similar lawsuit, and News Corp, along with Encyclopedia Britannica, Merriam-Webster, Nikkei, Asahi Shimbun, and Reddit, have also made claims against the startup. Wired and Forbes have accused Perplexity of plagiarism and unethical scraping of content from websites that explicitly prohibit such activity, a claim that internet infrastructure provider Cloudflare has corroborated. Perplexity's head of communications, Jesse Dwyer, has historically dismissed such lawsuits, suggesting they have never truly succeeded against new technologies; however, historical precedents show publishers have, at times, won or significantly influenced legal battles over emerging technologies, leading to settlements and new licensing frameworks.

The current lawsuit against Perplexity follows a cease and desist letter sent by The Times over a year ago, with the outlet claiming multiple attempts over 18 months to negotiate a content agreement. The Times' ongoing suit against OpenAI and Microsoft involves claims that their AI systems were trained using millions of articles without compensation. While OpenAI argues 'fair use' and accuses The Times of manipulation, a parallel lawsuit against OpenAI competitor Anthropic, concerning the use of pirated books for training, saw a court rule against using pirated content and resulted in a $1.5 billion settlement for Anthropic. This ruling could establish a significant precedent for fair use in AI training. Notably, The New York Times is open to partnerships with AI firms that provide fair compensation, having previously struck a multi-year deal with Amazon to license its content for AI model training. Similarly, other publishers like Associated Press, Axel Springer, Vox Media, and The Atlantic have entered into licensing agreements with AI companies.