Rupert Murdoch’s news outlets sue Perplexity AI for allegedly engaging in ‘massive freeriding’

By Liam Reilly, CNN

New York (CNN) — Rupert Murdoch’s Dow Jones, the parent company of the Wall Street Journal, and the New York Post sued Perplexity on Monday, accusing the generative AI company of illegally scraping its reporting and diverting traffic to its own platforms.

The News Corp-owned companies accused Perplexity of training its so-called answer machine using copyrighted material, using scraped content to generate responses to users’ questions, allowing them to circumvent news publishers’ websites.

“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,” the complaint alleges.

In a statement, Robert Thomson, chief executive of News Corp., said the AI company “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,” Thomson said. “Perplexity proudly states that users can ‘skip the links’ — apparently, Perplexity wants to skip the check.”

A Perplexity spokesperson did not immediately respond to a CNN request for comment.

Amid the rapid development of AI tools, news publishers have argued that the scraping of their reporting without permission or compensation to train chatbot models presents an existential threat to their business. While some publishers have opted to license their content to generative AI firms in exchange for modest fees, others have slapped the companies with lawsuits in the hopes of receiving a larger paycheck for their work and barring future theft of intellectual property.

Earlier this year, News Corp inked a massive deal with ChatGPT creator OpenAI, licensing its news content in an agreement reported to be worth more than $250 million.

In his statement Monday, Thomson said OpenAI differs from Perplexity in being “principled,” saying the Sam Altman-led company “understands that integrity and creativity are essential if we are to realise the potential of Artificial Intelligence.”

“Perplexity is not the only AI company abusing intellectual property and it is not the only AI company that we will pursue with vigor and rigor,” Thomson wrote. “We have made clear that we would rather woo than sue, but, for the sake of our journalists, our writers and our company, we must challenge the content kleptocracy.”

The lawsuit comes less than a week after The New York Times sent Perplexity a cease-and-desist letter, demanding the startup stop using the newspaper’s content.

“Perplexity and its business partners have been unjustly enriched by using, without authorization, The Times’s expressive, carefully written and researched, and edited journalism without a license,” the Times said in its notice.

The Times also sued OpenAI last year for copyright infringement, accusing the company of using its reporting to train its chatbots without permission, claiming billions of dollars in damages.

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