OpenAI’s head of ChatGPT, Nick Turley, wrote internally that publishers faced an “existential threat” from artificial intelligence products that were already “largely substitutive” and would become more so as they improved, according to a newly unsealed court memorandum filed Thursday.
The filing also cites Microsoft Director of Applied Science Brent Hecht describing the alleged copying as “an astonishing theft of unprecedented proportions” and perhaps the “largest theft of labor in human history.”
The publishers argue those warnings show that OpenAI and Microsoft knew their products would compete with the journalism used to develop them—a central issue in the companies’ fair-use defense.
A Microsoft document warned that the companies’ AI strategy had started a “doom loop” that would “hurt the performance of our models and the entire web at the same time.”
The publishers said Microsoft’s internal traffic data showed that loop was already taking shape. Click-through rates from Bing Chat were 87% to 93% lower for the Times’ websites and 83% to 91% lower for the Daily News plaintiffs’ sites when compared with traditional Bing searches, according to the motion.
Microsoft CEO Satya Nadella testified that conversations with chatbots had substituted for visits to publishers’ websites by “giving you the information right there on the website on the AI platform versus needing to go to the underlying source,” the filing said.
Nadella also testified that paywalled material should be licensed for AI training or grounding and agreed that companies should not access data in violation of a website’s terms of service. He said that, had he known OpenAI scraped and trained its models on paywalled material, he would have exercised Microsoft’s contractual right to require the company to retrain them.
The publishers alleged that the companies circumvented paywalls, traded news content with one another and jointly scraped the internet for training material. In one exchange cited in the filing, OpenAI employee Nick Ryder told company cofounder and president Greg Brockman about “a hack to get around nytimes paywall” for scraping. Brockman responded, “ah nice.”
The Times and other publishers argue that OpenAI and Microsoft copied their journalism without permission to build products that now compete with the original work.
OpenAI has accused the Times of seeking an “undeserved payday at the expense of progress” and argues that training artificial intelligence systems on copyrighted material is protected under the fair-use doctrine.
Microsoft said Nadella’s testimony was consistent with the company’s position in the case.
“He spoke to broad principles and changes underway in how people find and consume information,” a Microsoft spokesperson told TheWrap. “Those observations should not be confused with conclusions about copyright questions before the Court, which Microsoft addresses in its filings.”
Microsoft separately said Hecht’s remarks did not represent the company’s views.
“These comments reflect one employee’s individual perspective, are not a legal analysis, and do not represent the company’s views,” the spokesperson said. “Microsoft’s position is set out in its court filings, which explain why these transformative uses are consistent with copyright law and why Copilot is not a substitute for publishers’ journalism.”
The disclosures come from the publishers’ motion asking the judge to decide portions of the case without a trial. The court has not determined that either company infringed the publishers’ copyrights.
OpenAI did not immediately respond to TheWrap’s request for comment.
This story is developing …
