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Copyright litigation against OpenAI and Microsoft

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2026-10-04 15:53 UTC → 2026-10-06 02:24 UTC · added ~~removed~~

OpenAI and Microsoft are facing legal challenges in the U.S. District Court for the Southern District of New York regarding the use of copyrighted material to train artificial intelligence models. News organizations, including The Seattle Times and Newsday, have filed a lawsuit alleging that the companies used web scraping to collect journalistic content, including material behind paywalls. The plaintiffs argue that these AI tools can reproduce or closely paraphrase their reporting, which harms their business models. They are seeking financial compensation and a court order for the destruction of infringing datasets and models. Unsealed court documents from The New York Times’ lawsuit have intensified scrutiny. Internal communications reveal that Microsoft Director of Applied Science Brent Hecht described the large-scale scraping of news content as ‘an astonishing theft of unprecedented proportions’ and potentially ‘the largest theft of labor in human history.’ Hecht warned of a ‘doom loop’ where AI products diminish traffic to the news sites providing their training data. ~~Internal data noted that Copilot caused a decline of up to 93% in clicks to The New York Times compared to traditional Bing searches.~~ Microsoft has responded that Hecht’s comments represent his personal opinion rather than the company’s official legal stance. Recent unredacted legal documents have expanded on these warnings, detailing how rushing AI products to market could create economic ‘doom loops.’ Internal Microsoft documents suggest the company’s AI content strategy threatens the ‘content supply chain,’ potentially creating a cycle where AI monetizes human creative work while simultaneously undermining the economic systems that fund the original content. This risk is noted across journalism, music, and filmmaking, where AI tools may utilize content without driving revenue back to creators. In a Statement of Interest, the U.S. Department of Justice has advocated for classifying the training of AI models on copyrighted text as ‘fair use.’ The DOJ argues that such practices are essential for national security and U.S. economic ~~competitiveness, contrasting with previous rulings where training on specific datasets was deemed non-fair use due to direct competition with the original service.~~ competitiveness.

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