Wall Street Journal, New York Post Sue AI Startup Perplexity, Alleging ‘Massive Freeriding’

Dow Jones and the New York Post are suing the generative AI search engine, accusing the platform of siphoning traffic away from publishers’ websites.

News Corp is suing AI startup Perplexity, accusing it of siphoning away traffic from publishers.

Wall Street Journal parent Dow Jones and the New York Post are suing generative AI search engine Perplexity for copyright infringement, the latest battle between news publishers and the new crop of AI firms that use their content.

The News Corp-owned publishers are accusing the AI startup of copying copyrighted news content and using it to generate responses to users’ queries, siphoning away traffic that would otherwise go to publishers’ websites.

“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,” the publishers said in the complaint, which was filed in New York’s Southern District on Monday.

Representatives from Perplexity didn’t immediately respond to a request for comment.

Publishers are scrambling to assess the implications of generative AI technology for their businesses, which is leading to a mix of commercial deals and legal fights over alleged misuse of content.

News Corp earlier this year struck a deal with another artificial-intelligence firm, OpenAI, that could be worth more than $250 million over five years for the news conglomerate. The deal allows OpenAI to use content from News Corp’s consumer-facing news publications, including archives, to answer users’ queries and train its technology.

A number of news publishers have sent Perplexity legal notices requesting that the search engine stop using their content. The New York Times, which is suing OpenAI, recently sent Perplexity a “cease and desist.” In July, News Corp publishers also sent a letter to Perplexity addressing its “unauthorized use” of its copyrighted works and offering to discuss a potential licensing deal. Perplexity didn’t bother to respond, according to the complaint.

The legal clouds haven’t deterred investors from Perplexity, which is in talks to raise more than $500 million in its fourth funding round in a year, The Journal reported Sunday. The latest round would value the company at $8 billion.

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

The suit alleges that Perplexity can serve up parts or all of publishers’ articles in response to user queries, especially through its premium service, Perplexity Pro. The complaint cited an example of a New York Post article about a writer’s first trip to see a baseball game at Shea Stadium decades ago, which Perplexity allegedly reproduced in full in response to the question, “Can you provide the fultext of that article.” The suit also alleges that Perplexity can “hallucinate,” reproducing some content from an article verbatim but then riffing beyond that to add incorrect details. It cites a Wall Street Journal article about the U.S. arming Ukraine-bound F-16 jets with advanced weaponry, saying Perplexity attributed quotes to the article that never appeared in it.

The publishers in the suit are asking the court to order Perplexity to stop using and copying their copyrighted content without authorization, destroy any databases that contain its material, and award damages of up to $150,000 for each incident of copyright infringement.

WSJ