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Legal Implications of New York Times vs. OpenAI

Chris Hanslik

by Chris Hanslik

February 1, 2024

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The New York Times recently filed a landmark lawsuit against OpenAI and Microsoft, accusing them of copyright infringement in the training of the chatbot ChatGPT which launched just over a year ago.

The case promises to create debate on par with Section 230 of the Communications Decency Act (CDA), internet legislation from the 1996 Telecommunications Act allowing website platforms to exist without being held liable for user content. While Section 230 has helped foster free expression and innovation on the internet, it has faced criticism for allowing platforms to avoid responsibility for harmful content.

Similarly, this complex case will have far-reaching implications, most notably the potential to rewrite the rules of intellectual property in the age of artificial intelligence. Businesses are wise to take note.

The Claim

The Times claims that millions of their online articles were crawled to train ChatGPT, a generative language model capable of crafting human-like text. They’ve documented examples of alleged plagiarism where ChatGPT returns factual content and phrasing directly from New York Times articles. They also state that ChatGPT is diverting traffic, depriving them of advertising, licensing, and subscription revenue. The Times argues that this goes beyond fair use and undermines their investment in original journalism.

OpenAI, the not-for-profit research company behind ChatGPT, counters that training on publicly available information such as news articles falls under fair use.

What’s At Stake

A victory for The Times could establish a precedent requiring compensation for journalists and writers for copyrighted content used in AI training, impacting development of other large language models (LLMs) such as Google’s Gemini and Meta’s LLaMA. Conversely, a win for OpenAI could reinforce the current practice of using massive datasets without explicit permission from publishers, further muddying intellectual property rights in these digital times.

Why it Matters for Businesses

The New York Times vs. OpenAI lawsuit, while focused on journalism and AI, holds significance for companies across many sectors that are utilizing AI in conducting business and developing products. Here are key themes businesses should be aware of:

  • Copyright Landscape: A victory for The Times could set a precedent for financial compensation for any copyrighted content used in AI training, including marketing materials, internal documents, and product manuals. This could significantly impact companies relying on AI for content creation and analysis.
  • Data Privacy: The case raises questions about data ownership and control. Businesses heavily invested in collecting and using data might face stricter regulations or limitations on how it can be used for AI development.
  • Fair Use vs. Commercial Value: Companies using AI for monetization purposes may need to re-evaluate their data sourcing practices and ensure proper licensing or compensation for any copyrighted material used in training.
  • AI Development Costs: If compensation becomes the norm, the cost of developing and deploying AI solutions could rise significantly. Businesses might need to factor in new budgeting lines or adjust their reliance on AI-powered tools.
  • Financial Risks: Depending on the outcome, businesses adopting AI could face lawsuits claiming copyright infringement or demands for licensing fees.
  • Technology Advancements: The future of AI development hinges on this case. A restrictive ruling could dampen innovation and limit the capabilities of AI tools available to businesses. Yet a clear fair use framework could boost responsible AI development.

New York Times vs. OpenAI is a watershed moment for intellectual property law and artificial intelligence. Savvy business leaders should monitor the case to assess potential risks and compliance needs. The outcome could be years away, but the ramifications are broad and deserve proactive attention from businesses of all sizes.

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