The New York Times (NYT) recently sent a cease and desist notice to the AI startup Perplexity, demanding it stop using the newspaper's content. This notice was issued on October 2, 2024, and claims that Perplexity's use of NYT's material for generating summaries violates copyright laws.

The move is part of NYT's ongoing legal battles with various AI companies over content usage [1], highlighting the tension between traditional media and emerging technologies.

As of now, Perplexity has not publicly responded to the cease and desist notice. Previously, the company had assured NYT that it would discontinue its "crawling" technology to access content.

However, NYT asserts that its articles still appear in Perplexity's outputs, leading to this legal confrontation. Aravind Srinivas, CEO of Perplexity, expressed interest in collaborating with publishers, including NYT, indicating a willingness to resolve the issue amicably.

This situation is not an isolated incident; NYT has been involved in legal disputes with other AI companies as well. Notably, it previously sued OpenAI for using its articles without permission. This lawsuit is part of a broader effort by NYT to protect its content and ensure that proper licensing agreements are established with AI firms.

The legal action against Perplexity highlights significant concerns among news publishers regarding AI technologies. Publishers are increasingly worried about chatbots and AI systems creating summaries or other outputs based on their content without authorization.

The outcome of this dispute could set important precedents for how AI companies handle copyrighted material in the future. As generative AI continues to evolve, clarity around licensing agreements will be crucial for both publishers and tech firms.

The NYT's determination to protect its content may inspire other publishers to take similar actions against AI companies that utilize their material without consent.

In this fireside chat at Stripe, Aravind Srinivas (Cofounder and CEO, Perplexity) and David Singleton (CTO, Stripe) discuss how Perplexity are building a new AI-powered alternative to traditional search engines, their journey so far, the tech behind it, and the rapidly evolving digital search landscape.

The outcome of lawsuits like the one involving NYT and Perplexity will likely establish [legal precedents regarding how AI companies can use copyrighted material [4]. If courts rule in favor of NYT, it could set a standard that restricts AI firms from using large datasets scraped from the internet without explicit permission, fundamentally altering how these models are trained.

This could lead to stricter regulations on data usage, requiring AI developers to seek licenses for any copyrighted content they wish to incorporate.

The legal challenges underscore training generative AI models' ethical and legal implications. As more media companies take action to protect their intellectual property, AI developers may need to rethink their approaches to content creation.

This could involve investing in partnerships with publishers or developing proprietary datasets that do not infringe on existing copyrights [2]. Such changes might slow down innovation in generative AI but could also foster more responsible practices within the industry.

A critical aspect of these legal battles revolves around the [fair use doctrine [, which allows limited use of copyrighted material without permission under certain circumstances. Courts will need to determine whether using copyrighted content for training AI models constitutes fair use or if it infringes on copyright protections.

A ruling that favors fair use could pave the way for broader applications of generative AI [3], allowing developers to utilize vast amounts of data while still respecting creators' rights.

As these legal disputes unfold, there will likely be increased scrutiny and potential regulation surrounding AI technologies. Governments may step in to create guidelines for how AI can interact with copyrighted material, similar to recent executive orders aimed at establishing guardrails for AI usage.

This regulatory framework could help balance the interests of content creators and technology developers, ensuring that both parties can coexist in a rapidly changing digital environment.

The tension between traditional media outlets and AI firms may also lead to [more collaboration [ between these sectors. Companies like Perplexity have expressed interest in working with publishers to create mutually beneficial agreements that allow for the use of content while compensating creators fairly.

Such partnerships could become a model for future interactions between media organizations and technology companies, fostering innovation while respecting intellectual property rights.

The tension between traditional media outlets and AI firms may also lead to  more collaboration between these sectors [5]. Companies like Perplexity have expressed interest in working with publishers to create mutually beneficial agreements that allow for the use of content while compensating creators fairly [6]. Such partnerships could become a model for future interactions between media organizations and technology companies, fostering innovation while respecting intellectual property rights.

In conclusion, the legal battle between The New York Times (NYT) and AI startups like Perplexity underscores a critical moment in the intersection of journalism and technology. While NYT raises valid concerns about copyright infringement, it must also acknowledge that the genie is out of the bottle. The rise of AI technologies has irrevocably transformed how information is accessed and consumed.

Both sides face the challenge of navigating this complex landscape, where finding a balance between innovation and intellectual property rights is essential for fostering a sustainable relationship between media outlets and AI developers.

This ongoing saga is not merely about one company’s use of another’s content; it represents a broader struggle over the future of AI content generation.

As courts make decisions that will shape copyright law in relation to artificial intelligence, the outcomes will influence how generative AI evolves. This could lead to more ethical practices, clearer regulations, and innovative partnerships that respect the rights of content creators while harnessing the power of technology.

Ultimately, this chapter in the narrative of technology and journalism will continue to unfold as both industries adapt to new realities. The legal precedents established in this case may set the tone for how AI companies operate moving forward, ensuring that they do so in a manner that acknowledges and respects the contributions of traditional media.

[1] WHBL/Reuters – The New York Times has sent generative AI startup Perplexity a “cease and desist” notice.

[2] USA News NYT Sends AI Start-Up Perplexity Cease-and-Desist Notice Over Content Use WSJ Reports

[3] Engadget The New York Times Tells Perplexity to Stop Using It's Content

[4] Perplexity Assistant

[5] Yahoo Finance New York Times had Generative AI

[6] Forbes Perplexity AI Legal Action Copyright

Mark Derho is a seasoned expert in the Internet industry with over 25 years of experience in NYC's software development, digital marketing, and advertising sectors. A certified Google Partner, Mark specializes in content creation, AI chatbot development, open-source software, modern website design, and SEO/SEM marketing. He leads PR Website Agency and lives in Puerto Rico with his dog, Luno.