As one major tech vendor makes deals with publishers, another is being sued by an influential publisher.
On Friday, The New York Times filed a lawsuit against generative AI startup Perplexity for copyright infringement. The Times accuses Perplexity of illegally crawling its material and using its original journalistic reporting without permission or compensation.
In a statement on the Times’ website, spokesperson Graham James said:
“While we believe in the ethical and responsible use and development of AI, we firmly object to Perplexity’s unlicensed use of our content to develop and promote their products. We will continue to work to hold companies accountable that refuse to recognize the value of our work.”
The same day The Times filed its lawsuit in a New York federal court, social media giant Meta said it is partnering with media outlets including CNN, Fox News, People Inc. and USA Today.
With the agreement, social media users will receive more real-time information when they ask Meta AI questions related to news, according to Meta.
Content Creators Versus AI Vendors
Both the Times’ lawsuit against Perplexity and Meta’s partnerships with publishers reveal an AI market that is still struggling to determine who owns content and what copyright means in the age of generative AI technology.
Over the last three years, since the release of ChatGPT, the dynamic has shifted from panic about what it means for AI chatbots and systems to be able to draw from original content and repurpose it, to many content creators fighting back and demanding compensation.
One of the most notable battles for compensation was when the New York Times sued OpenAI for using the Times’ content to train its models without permission. Since that lawsuit, which is still going on, many others have followed, including Getty Images suing Stability AI and authors suing Anthropic.
Resolutions have been reached in some of the cases. For instance, Anthropic settled its lawsuit and agreed to pay the authors $1.5 billion, others are still awaiting court judgments, and still others, like Perplexity, continue to face a slew of allegations in the form of lawsuits.
The Times Verus Perplexity
Photo credit: Michael M. Santiago via Getty Images
Perplexity’s suit against the Times was a long time coming, as the publisher sent the AI search vendor a cease-and-desist notice in October 2024 and another in July 2025.
In its suit, the Times alleges that it engaged in negotiations with Perplexity for more than 18 months, but the vendor continued to use its content without a licensing agreement. The Times also said the Perplexity search engine uses wrongful attribution, claiming it wrote or published something it never did.
“The New York Times has got a very solid case because there’s a lot at stake here,” said Michael McCready, managing director of McCready Law in Chicago. “If The New York Times loses and Perplexity is allowed to continue whatever they’ve been doing and accessing the New York Times, that creates a precedent for a lot of other AI companies.”
He added that the fact that the Times tried to work with Perplexity over 18 months means the publishing company is confident it will win.
However, Perplexity can also make the argument about the transformative power of large language models (LLMs), McCready continued. “All they need to do is have one subscription,” he said. If an AI vendor has one subscription, it can argue that it’s not merely republishing the material, but the trained material transforms the original into new expression of ideas.
“A lot of this lawsuit is going to depend on how the LLM was trained, what content it produces and whether it displaces the market for The New York Times,” McCready added. “Those are all going to be factual questions that a judge or a jury is going to decide ultimately, and where the evidence is going to land for each of those questions is going to be how the case is going to turn out.”
The Times is also not the only company challenging the vendor. Last month, Amazon threatened to sue Perplexity because the AI shopping agent was allegedly shopping for users on Amazon’s website, posing as human users. In October, Reddit filed a lawsuit against the vendor and other so-called data scrapers, accusing them of illegally stealing content and using it to train its AI models.
A Business Tactic
The New York Times lawsuit could also be a business tactic, “to add more pressure to Perplexity to determine whether it can actually win the lawsuit,” said Michael G Bennett, associate vice chancellor for data science and artificial intelligence strategy at the University of Illinois Chicago. “And then adding pressure to it in terms of the negative perception that more than a few people will take of Perplexity as a result of this lawsuit.”
Perplexity still needs to appeal to investors, so a case brought against it by one of the country’s oldest publishers is a blemish, Bennett added.
In an emailed statement, Jesse Dwyer, Perplexity’s head of communications wrote, “Publishers have been suing new tech companies for a hundred years, starting with radio, TV, the internet, social media and now AI. Fortunately, it’s never worked, or we’d all be talking about this by telegraph.”
With this argument, Perplexity will have to make a strong argument in court that its business practices amount to fair use (legal and permitted use of copyrighted material in the pursuit of free expression), Bennett said.
The Need for a Deal
The cases against Perplexity, as well as Meta’s move to partner with various publishers, demonstrate a need for a licensing agreement between content creators, publishers, and AI vendors, similar to a recent deal in the music industry between songwriters and record labels, McCready said.
“There needs to be developed some kind of licensing that will allow LLMs access to all of this content, and it will allow the content creators to get some money,” he said. “Case-by-case basis is just not practical.”