The New York Times has filed a lawsuit against OpenAI and Microsoft, claiming that the two tech giants pose a billion-dollar threat to its business. The lawsuit alleges that the Times’ articles were instrumental in the development of OpenAI’s previous GPT models, giving them a competitive advantage in the market. The Times asserts that settled copyright law protects its journalism and content, and that the law requires Microsoft and OpenAI to obtain permission before using their work for commercial purposes.
According to the Times, it attempted to resolve these issues with Microsoft and OpenAI in April but was unable to reach an agreement. While other content owners, such as Axel Springer, have formed partnerships with OpenAI, the Times is the largest complainant in this matter.
The Times outlines three ways in which OpenAI and Microsoft could significantly impact its business. Firstly, the Times has invested heavily in building a subscription business, which now boasts over 10 million subscribers. The majority of these subscribers are digital-only, with digital subscriptions generating more than half of the company’s total revenue in Q3. However, the Times fears that Microsoft’s OpenAI-powered search engine, Browse with Bing, could potentially recite paywalled articles directly, thereby undermining the Times’ subscription revenue.
Furthermore, the Times’ product recommendation website, Wirecutter, heavily relies on affiliate marketing for revenue. When readers click on recommended products and make a purchase, Wirecutter receives a portion of the sale. However, Bing’s OpenAI-powered search engine displays Wirecutter’s recommendations without users needing to visit the Wirecutter website. This means that Wirecutter loses out on revenue from facilitated sales, as readers can purchase the recommended products without navigating to Wirecutter’s site.
Finally, the Times raises concerns that synthetic search responses generated by OpenAI could diminish traffic volume to their website. Even if these synthetic responses include links to the original sources, the Times argues that users may be less motivated to click through and verify the information, potentially affecting advertising revenue. The Times claims that users may trust the summarized version presented in the search results without feeling the need to access the original article.
The lawsuit emphasizes the significance of these challenges to the Times’ business model and calls for Microsoft and OpenAI to address the potential ramifications their technologies may have on the news industry. As this legal battle unfolds, the Times and other content creators will be closely watching the outcome, hoping to protect their intellectual property and secure their financial future in the digital age.
