OpenAI, Microsoft executive quotes threaten copyright defense, news outlets argue

By Blake Brittain

Sept 17 (Reuters) - OpenAI and Microsoft executives privately described their AI products as substitutes for journalism, according to court filings made public on Thursday that the New York Times and other news outlets say gut the tech companies' fair-use defense in a closely watched copyright case.

OpenAI and its largest financial backer, Microsoft, have argued in the Manhattan federal court case that their AI training on millions of newspaper articles is protected as fair use because it transforms copyrighted material into new content and does not compete with or replace the news organizations' journalism.

Previously redacted portions of the filing made public on Thursday revealed quotes from OpenAI co-founder and president Greg Brockman, Microsoft CEO Satya Nadella and others during the discovery process that the news organizations say "eviscerate" the companies' fair-use defense to the infringement claims.

The outlets quoted OpenAI's head of ChatGPT, Nick Turley, as saying that publishers face an "existential threat" from their products, which are "largely substitutive" and "will get more and more substitutive as they get better."

Spokespeople for OpenAI did not immediately respond to requests for comment on the filing.

A New York Times spokesperson declined to comment.

"The evidence revealed here for the first time shows that OpenAI and Microsoft knew that what they were doing was wrong," Steven Lieberman, an attorney for the New York Daily News and seven other newspapers involved in the case, said in a statement.

The lawsuit, first filed in 2023, accuses OpenAI and Microsoft of using millions of articles without permission to train ChatGPT from news sources that also include Ziff Davis publications, the Intercept and the Center for Investigative Reporting.

Dozens of other complaints have also been brought by copyright owners against tech companies over what they call the theft of their material to train AI systems.

The cases will likely turn on whether AI systems make fair use of copyrighted material by using it to create transformative new content. That question was at the center of arguments OpenAI and Microsoft made to US District Judge Sidney Stein in September 4 court filings.

The Trump administration supports the AI companies and told Stein on September 1 that AI training is "extraordinarily" transformative.

According to the outlets' Thursday filing, Brockman wrote that large language models are "'particularly good at predicting text of news articles,' 'excellent at news,' and 'very good at any news task,'" and responded "ah nice," when he was told that OpenAI employees had discovered a "hack" to get around the New York Times' paywall.

Nadella agreed under oath that conversing with chatbots “has substituted ... giving you the information right there on the website on the AI platform versus needing to go to the underlying source.”

Microsoft said Nadella's comment did not undermine the company's defense in the copyright case.

"Satya’s testimony and Microsoft’s position in this case are perfectly consistent," a Microsoft spokesperson said in a statement on Thursday. "He spoke to broad principles and changes underway in how people find and consume information."

"Those observations should not be confused with conclusions about copyright questions before the Court, which Microsoft addresses in its filings," the spokesperson added.

The filing also quoted Microsoft's director of applied science, Brent Hecht, as saying that "millions of people" would consider AI companies "'hoovering up’ all their work" to be "an astonishing theft of unprecedented proportions."

"These comments reflect one employee’s individual perspective, are not a legal analysis, and do not represent the company’s views," the Microsoft spokesperson said in response.

(Reporting by Blake Brittain in Washington, Editing by Alexia Garamfalvi and Sonali Paul)