Market Commentary

NY Times Takes Legal Action Against OpenAI and Microsoft

Laiba Bilqees
1 Jan 2024 · 1 minute read

The New York Times (NYT:US) has taken legal action against OpenAI and Microsoft (MSFT:US), alleging the unauthorized use of its articles to train artificial intelligence. This landmark lawsuit targets ChatGPT and other AI platforms, accusing them of leveraging the NYT’s content without permission.

In Manhattan federal court, the NYT claimed OpenAI and Microsoft utilized their journalistic investment to create products that compete with and draw audiences away from the NYT, deeming it a non-transformative use of their content.

Both accused entities have yet to respond to the allegations.

The NYT refrained from specifying damages but estimated losses in the billions. They seek the destruction of chatbot models and training sets that integrate their copyrighted material.

The situation is complicated by Microsoft's significant investment in OpenAI, valued at over $80 billion by investors, despite OpenAI's non-profit status. Notably, other authors and entertainers, including David Baldacci, Jonathan Franzen, and Sarah Silverman, have also sued these companies, highlighting broader concerns about AI's use of copyrighted material.

In financial disclosures, Representative John Curtis sold MSFT shares worth $15,000 to $50,000 on December 4, while Senators Tommy Tuberville and Shelly Moore Capito sold shares ranging from $1,000 to $15,000. These transactions coincide with the unfolding legal proceedings, potentially reflecting concerns among investors about the implications of the lawsuit on Microsoft's future.