AI Firms Face Growing List of Lawsuits. Here’s What to Watch

Artificial intelligence firms are facing increasing pressure from some of the world’s most formidable names in technology and media, as new tools spark fresh questions over the risks posed by chatbots that threaten to rival human intelligence.

Elon Musk became the latest power player to sue OpenAI, alleging the company and its chief executive officer, Sam Altman, have strayed from their original mission by prioritizing profit over the benefit of humanity.

The lawsuit filed Thursday adds to a growing list of legal complaints against the ChatGPT maker in recent months. It has been sued by famous authors such as John Grisham and Jodi Picoult, journalists and news outlets, including the New York Times. It also faces a probe by the Securities and Exchange Commission about whether it misled investors following its ouster of Altman in November — before he was rehired.

Many of the complaints targeting AI firms like OpenAI accuse them of violating copyright law and illegally swiping information from media firms online. Victory for plaintiffs could mean AI companies would have to pay to use certain material to train their programs, said Justin Hughes, a professor at Loyola Law School who studies copyright law.

“There are some folks who say melodramatically that copyright ‘threatens’ this new technology or that copyright could bring generative AI to a halt. That is totally false,” Hughes said. “I hope the future of AI will be determined, in part, by thoughtful, balanced policy and regulations — copyright will neither wound nor kill generative AI.”

Here are the major lawsuits to watch:

Elon Musk v. Sam Altman, Gregory Brockman, OpenAI Inc.

Musk is accusing the company he helped establish of breaching its founding agreement by prioritizing profits over the benefit of humanity.

The startup was founded as a nonprofit and as a foil to other artificial intelligence ventures, Musk’s lawyers said in the complaint. But they claim the startup has been “transformed into a closed-source de facto subsidiary of the largest technology company in the world” in a breach of its mission.

The Tesla Inc. CEO and owner of X Corp., formerly Twitter, has said artificial general intelligence poses an “existential threat.” Musk, the world’s richest person, stepped down from OpenAI’s board in 2018 over philosophical differences about the technology’s development.

The New York Times Co. v. Microsoft Corp.

The New York Times sued OpenAI and its largest investor Microsoft Corp. late last year, claiming the startup unlawfully used millions of Times articles to build out its artificial intelligence tool.

The suit alleges chatbots like ChatGPT “seek to free-ride” on the Times’s content and threaten to stifle its revenue. But the tech startup, seeking to dismiss some of the claims, fired back and accused the Times of paying someone to hack its products and generate anomalous outputs in support of its claims.

The litigation comes at an especially grim moment for the media — scores of news outlets have recently shuttered or laid off staff, many of them struggling to turn a profit in the face of dwindling revenue from ads.

Axel Springer, Other Media Outlets Sue Google

A group of more than 30 European media organizations sued Google on Wednesday in the Netherlands seeking $2.3 billion and accusing the search giant’s advertising business of violating antitrust laws.

The media groups, which include Politico owner Axel Springer, allege the Alphabet Inc. unit’s “dominant” position in the advertising market has shortened up their revenue streams and caused them to face higher costs for ad tech services, according to a statement from the law firms representing the plaintiffs.

The Intercept Media Inc. v. OpenAI Inc. and Raw Story Media Inc. v. OpenAI Inc.

Raw Story Media Inc., The Intercept Media Inc. and AlterNet Media Inc. filed a pair of lawsuits against OpenAI Wednesday in federal court in Manhattan.

The news organizations claim OpenAI and co-defendant Microsoft violated the 1998 Digital Millennium Copyright Act by stripping away copyrighted information when they trained ChatGPT.

Basbanes v. Microsoft Corp.

The journalist Nicholas Gage and author Nicholas Basbanes filed a proposed class-action lawsuit against Microsoft and OpenAI in January, claiming the companies wrongfully used their work to train AI models.

Gage has written investigative stories for the New York Times and the Wall Street Journal. Basbanes has written books about the history of publishing.

Sancton v. OpenAI Inc.

OpenAI was sued by journalist and nonfiction author Julian Sancton. The author of “Madhouse at the End of the Earth” claimed the company used his work without permission to train its generative AI tools. Sancton said OpenAI and Microsoft “completely disregarded” authors’ rights when developing the models that power ChatGPT.

That training process “has usurped authors’ content for the purpose of creating a machine built to generate the very type of content for which authors would usually be paid,” according to the November complaint.

Concord Music Group v. Anthropic PBC

A group of top music publishers including Concord Music Group sued AI company Anthropic. The October complaint alleges the Amazon-backed startup has used copyrighted lyrics from at least 500 songs, and that its Claude AI chatbot disseminates them on its platform.

Authors Guild v. OpenAI LP

The Authors Guild of America filed a class-action suit against OpenAI alongside more than a dozen renowned writers, including “Game of Thrones” author George R.R. Martin. Microsoft was later added as a defendant.

The organization claims the company’s large language models engage in “systematic theft on a mass scale.” Previously, more than 15,000 authors including Margaret Atwood and Nora Roberts had signed a letter calling on companies such as OpenAI, Meta, Microsoft and IBM to compensate authors for using their works.

Other Cases to Watch

--With assistance from Isaiah Poritz.

To contact the reporters on this story:
Antonia Mufarech in New York at amufarechdiu@bloomberg.net;
Ethan M Steinberg in New York at esteinberg24@bloomberg.net

To contact the editors responsible for this story:
Misyrlena Egkolfopoulou at megkolfopoul@bloomberg.net

Peter Blumberg

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