The New York Times Company has initiated legal action against Microsoft Corporation and OpenAI, encompassing various OpenAI entities, within the United States District Court, Southern District of New York. The lawsuit alleges that Microsoft and OpenAI have unlawfully utilized copyrighted content from The New York Times to develop and improve artificial intelligence products, specifically generative AI tools such as Microsoft’s Bing Chat and OpenAI’s ChatGPT. These AI products, as asserted, have been constructed using extensive training on large language models that incorporate copyrighted materials from The Times, including news articles, opinion pieces, and other journalistic content, without proper authorization or compensation.

The complaint underscores The New York Times' longstanding reputation as a bastion of independent journalism spanning over 170 years, dedicated to delivering comprehensive reporting and analysis across various subjects, often at considerable risk and expense. It underscores the crucial role of copyright law in safeguarding creators' rights, allowing them to benefit from their creative endeavors and investments. The Times contends that Microsoft and OpenAI's alleged actions not only violate these rights but also jeopardize its capacity to provide high-quality journalism by exploiting its investments to produce competing AI-driven products.

Moreover, the lawsuit elucidates the operational mechanisms of Microsoft and OpenAI's generative AI tools, underscoring the incorporation of The Times' copyrighted works in training their AI models. The Times argues that this practice involves extensive replication of its content and results in AI outputs that either directly replicate or closely paraphrase its copyrighted materials, thereby generating substitutes for its products. According to The Times, this undermines its rapport with readers and diminishes crucial revenue streams such as subscriptions, licensing, advertising, and affiliate income.

The lawsuit also addresses the issue of AI-generated "hallucinations," instances where the AI tools fabricate content or attribute false information to The Times, potentially damaging its reputation and eroding public trust. The Times seeks to hold Microsoft and OpenAI accountable for copyright infringement, seeking billions of dollars in statutory and actual damages for the unauthorized copying and utilization of its content.

In response to the lawsuit, OpenAI issued a statement affirming its commitment to developing AI tools that empower individuals to tackle complex problems. OpenAI highlighted its extensive adoption globally, with millions of users, including over 92% of Fortune 500 companies, benefiting from its solutions. Regarding The New York Times' allegations, OpenAI views it as an opportunity to clarify its business practices and technological approaches. It emphasizes its collaboration with news organizations to foster a robust news ecosystem, citing partnerships with industry leaders such as the Associated Press and Axel Springer. OpenAI defends its use of publicly available internet materials for AI model training as fair use, offering publishers an opt-out option. Additionally, it addresses concerns of model "regurgitation" by attributing it to rare learning process failures and implementing mitigating measures. Despite the lawsuit, OpenAI remains committed to advancing journalism through AI advancements and looks forward to continued collaboration with The New York Times and other news organizations, reaffirming its dedication to its mission of developing AI tools that empower individuals and improve lives.