Perplexity CEO 'Surprised' by Dow Jones, New York Post Lawsuit

The chief executive officer (CEO) of Perplexity AI, Aravind Srinivas, has expressed surprise at the recent lawsuit filed by Dow Jones and the New York Post against his startup. The lawsuit, which was filed on Monday, October 21, 2024, alleges that Perplexity has engaged in "massive illegal copying" of copyrighted content from the news outlets, diverting critical revenues away from the publishers.

In an interview with Reuters, Srinivas stated, "We are surprised by the lawsuit, as we have always been transparent about our use of AI and have been in talks with various publishers to explore licensing deals." He further added, "We believe that our use of AI is transformative and falls within the fair use doctrine, and we are confident that we will be able to resolve this matter amicably."

Perplexity AI is an AI startup that uses large language models (LLMs) to generate summaries of news articles and other content. The company has been accused of scraping copyrighted content from various news sources, including The Wall Street Journal and The New York Post, to train its AI models without proper authorization or compensation.

The lawsuit alleges that Perplexity's AI-driven search engine uses a variety of LLMs, including OpenAI and Meta's open-source model Llama, to generate instant answers to user questions. The complaint claims that Perplexity's business model relies on scraping copyrighted content at a large scale, offering users responses that substitute for direct visits to news websites.

The news publishers seek to differentiate Perplexity from search engines, arguing that while search engines allow for the discovery of their work, Perplexity's AI-generated answers substitute for direct visits to news websites. The lawsuit claims that Perplexity's AI-generated "answer machine" has ingested its copyrighted news stories, analysis, and opinion in an internal database used to generate responses to users' questions.

The lawsuit also accuses Perplexity of damaging the publishers' brands by falsely attributing content and generating responses with inaccurate information. Despite a prior letter from Dow Jones and the New York Post offering to discuss a potential licensing deal, the AI startup did not respond, according to the legal filing.

News Corp CEO Robert Thomson criticized Perplexity for what he described as "willfully copying copious amounts of copyrighted material without compensation" and passing it off as original content. He stated, "Perplexity perpetrates an abuse of intellectual property that harms journalists, writers, publishers, and News Corp. The perplexing Perplexity has willfully copied copious amounts of copyrighted material without compensation, and shamelessly presents repurposed material as a direct substitute for the original source."

The lawsuit reflects a broader concern in the publishing industry as AI tools increasingly rely on third-party content to train models and generate outputs. As AI startups like Perplexity continue to grow and attract significant investment, publishers are becoming more vocal about the need for proper compensation and licensing agreements.

Perplexity has previously announced plans for a revenue-sharing initiative and indicated that it would reduce reliance on scraping technologies. The company also hinted at introducing advertising to its platform, potentially courting brands aligned with news outlets in an effort to drive revenue. However, the recent lawsuit may cast a shadow over Perplexity's fundraising efforts and its valuation in the eyes of potential investors.

In conclusion, the lawsuit filed by Dow Jones and the New York Post against Perplexity AI highlights the growing tension between AI companies and publishers over the use of copyrighted content. As AI startups continue to innovate and attract investment, it is crucial for them to engage in open dialogue with publishers and establish fair licensing agreements to ensure the protection of intellectual property and the sustainability of the publishing industry.