What Happened
On December 27, 2023, The New York Times Company filed a lawsuit in the Southern District of New York against OpenAI and Microsoft, alleging that both companies infringed the Times’ copyrights by using millions of articles to train large language models including GPT-4 and those powering Microsoft’s Copilot products. The 69-page complaint included exhibits showing ChatGPT reproducing near-verbatim excerpts of Times articles, including investigative journalism and opinion pieces.
The Times sought billions of dollars in statutory and actual damages, demanded the destruction of all models trained on its content, and requested an injunction against future use. The lawsuit came after months of failed licensing negotiations between the Times and OpenAI, during which OpenAI reportedly offered a licensing deal that the Times rejected as inadequate.
Why It Matters
This is the most consequential copyright case in the AI era. The New York Times is the first major media organization to reject the “fair use” defense that AI companies rely on to justify training on copyrighted content. The case has the potential to establish whether AI model training constitutes transformative fair use or wholesale copyright infringement. A ruling against OpenAI could require the company to license or exclude vast amounts of training data, fundamentally altering the economics of AI development. A ruling for OpenAI could establish that AI training on copyrighted material is fair use, devastating traditional media business models.
Lessons Learned
The AI industry’s reliance on the fair use defense for training data is legally untested and potentially fragile. Content creators are willing to litigate rather than accept below-market licensing deals. The ability of AI systems to reproduce near-verbatim training data undermines the “transformative use” argument. AI companies need to develop sustainable content licensing frameworks proactively rather than waiting for court mandates.
Current Status
The case remains active in federal court. Judge Sidney Stein denied OpenAI’s motion to dismiss key claims. Both parties have engaged in extensive discovery. The case is being closely watched as a bellwether for dozens of similar lawsuits filed by authors, musicians, and other creators. Settlement discussions have been reported but neither party has confirmed terms. The outcome will likely influence AI copyright law globally.