On December 27, 2023, the New York Times filed a lawsuit in the Southern District of New York for federal copyright infringement against both OpenAI, maker of ChatGTP, as well as Microsoft, an investor of ChatGTP and creator of their own artificial intelligence platform. The lawsuit alleges that the companies’ AI chatbots have been using The Times’ copyrighted material in their automatic collection of internet data (scraping) to produce content, as well as to train the AI language models. The parties had been negotiating a settlement, but that fell through.
Microsoft and OpenAI have previously claimed that their use of the copyrighted material is Fair Use. Fair Use is a common defense to copyright infringement, which contends, generally, that the copyrighted material is transformed into a new work, by changing its purpose. A typical example of fair use is a parody or educational use.
Preempting that Defense, The Times pointed out in its complaint that “there is nothing ‘transformative’ about using The Times’s content without payment to create products that substitute for The Times and steal audiences away from it.”
The newspaper estimates that their damages are in the billions.
The Times v. OpenAI case could set a pivotal precedent for how courts interpret copyright in the AI age. As platforms like ChatGPT continue to grow, legal systems will be forced to decide whether using copyrighted data to train these models is a transformative fair use—or a violation with billion-dollar consequences.
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