Perplexity AI firm sued for “massive freeriding”

Rupert Murdoch’s Dow Jones, the parent company of the Wall Street Journal, has sued generative AI startup Perplexity for copyright infringement.

The lawsuit is just the latest battle in an ongoing conflict between publishers and tech companies eager to use as much content as possible to build their AI systems.

As in most previous cases, the News Corp-owned publishers are accusing Perplexity, an AI startup backed by Amazon founder Jeff Bezos and chip maker Nvidia, of copying news content and then using it to generate responses to users’ queries.

This can be done legally, and indeed, News Corp struck a deal earlier this year with another AI firm, OpenAI, under which the news conglomerate could be paid more than $250 million over five years.

However, according to the lawsuit, Perplexity concocted a cheeky scheme to train its models for free, thus siphoning away traffic that would otherwise go straight to publishers' websites. This is critical revenue to most outlets.

Moreover, Perplexity has allegedly ignored all legal notices from various news publishers to stop using their content – even while the firm is in talks to raise more than $500 million in its fourth funding round in a year.

“This suit is brought by news publishers who seek redress for Perplexity's brazen scheme to compete for readers while simultaneously freeriding on the valuable content the publishers produce,” reads the lawsuit (PDF) filed in the Southern District of New York.

Perplexity uses a variety of large language models to generate its summaries, from OpenAI to Meta's open-source model Llama. It provides citations in those results, though Perplexity's own marketing promotes the notion that its interface enables users to “Skip the Links.”

According to the plaintiffs, Perplexity “loudly touts” that its answers to user queries are so reliable that its users can “Skip the Links” to the original publishers and instead rely wholly on Perplexity for their news and analysis needs.

“What Perplexity does not tout is that its core business model involves engaging in massive freeriding on Plaintiffs’ protected content to compete against Plaintiffs for the engagement of the same news consuming audience, and in turn to deprive Plaintiffs of critical revenue sources,” reads the document.

News Corp CEO Robert Thomson added in a statement: “Perplexity perpetrates an abuse of intellectual property that harms journalists, writers, publishers, and News Corp.”

The New York Times also recently sent Perplexity a “cease and desist” notice. The daily’s deadline for Perplexity to respond is October 30th, but the AI startup has already argued that “no one organization owns the copyright over facts.”

And while The New York Times is currently suing (PDF) OpenAI and Microsoft over illegal training of AI models on its content, News Corp seems really happy with its deal with OpenAI, struck in May.

Thomson applauded OpenAI for understanding “that integrity and creativity are essential” to realize the potential of AI.

Meanwhile, Perplexity, the lawsuit says, has – typically for a new large language model – hallucinated. In one case, it reproduced some content from an article about the US arming Ukraine-bound F-16 jets with advanced weaponry but attributed quotes that never appeared in the story.