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MANHATTAN (CN) — Media baron Rupert Murdoch’s Dow Jones and New York Post accused an AI-driven search engine and chatbot in a lawsuit Monday of growing its user base through the scraping and theft of a massive volume of copyrighted online news writing, including the Wall Street Journal.
The pair of Murdoch companies say Perplexity AI, which touts its technology as a platform that lets users “skip the links” to online articles, illegally indexed their websites to train the large language model it uses to generate the artificial intelligence responses to users’ search queries.
Represented in Manhattan federal court by Paul Cappuccio, the former general counsel of AOL and Time Warner, the two news publishers accused Perplexity AI of “massive freeriding” on their copyrighted online news content in competition for the engagement of the same news-consuming audience.
“Seeking to capitalize on this vast market for content, defendant Perplexity has raised significant capital to build a so-called ‘answer engine’,” the publishers wrote in the complaint. “Its AI ‘answer engine’ copies on a massive scale, among other things, copyrighted news content, analysis, and opinion as inputs into its internal database. It then uses that copyrighted content to generate responses to users’ queries that are intended to and do act as a substitute for news and other information websites.”
The publishers say the generative AI search engine misappropriates and drastically shifts advertising revenue away from news publishers as the creators and owners of the copyrighted works.
“The substantial fundraising Perplexity has accomplished, totaling in excess of $150 million, and Perplexity’s current market valuation, which purports to be in excess of $3 billion, is indicative of the potentially massive illegal transfer of revenue from news publishers to Perplexity, purposefully accomplished by Perplexity,” they wrote.
Cappuccio will joined on the case by fellow Torridon Law partner William Barr, the former U.S. attorney general under President George H. W. Bush from 1991 to 1993 and again under President Donald Trump from 2019 to 2020. His pro hac vice application is forthcoming.
The complaint includes two counts of copyright infringement and one count false designation of origin and dilution of plaintiffs’ trademarks.
The publishers assert that neither the verbatim reproductions of their articles nor paraphrases and summaries generated by Perplexity constitute fair use of their copyrighted material.
The companies also claim that Perplexity repeatedly misquotes The Wall Street Journal and generates fictitious and fake news stories attributed to the paper, which AI developers euphemistically refer to as “hallucinations.”
San Francisco-based Perplexity calls itself an “AI-powered Swiss Army Knife for information discovery and curiosity.” It aims to disrupt Google and Meta’s market domination in the online search and advertising industry.
Perplexity AI has raised tens of millions of dollars from prominent tech investors, including Amazon founder Jeff Bezos who backed the startup early during a January 2024 funding round that valued the company at over $500 million. The company is currently in fundraising talks seeking to more than double its valuation to $8 billion or more, the Wall Street Journal reported on Sunday.
Last week, The New York Times, which is already engaged in pending litigation against Microsoft’s Copilot and OpenAI’s ChatGPT, sent Perplexity a cease and desist letter demanding that the startup stop using content from newspaper’s site, first reported by the Wall Street Journal.
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