AI Companies’ Internal Admissions Fuel Massive Copyright Lawsuit by U.S. News Publishers

The New York Times, New York Daily News, Orange County Register and dozens of other outlets filed a federal copyright infringement suit in June 2023, alleging that OpenAI and its largest backer Microsoft used millions of articles without permission to train large-language models such as ChatGPT and Copilot. The case has expanded to represent more than 550 publications, including the Tampa Bay Times, The Austin Chronicle and the Alternative Newsweekly Foundation, highlighting a nationwide concern that AI training may erode the economic foundations of journalism.

Reuters

• September 1 – The Trump administration submitted a brief to U.S. District Judge Sidney Stein, describing AI training as “extraordinarily” transformative.

Reuters

• September 4 – OpenAI and Microsoft presented arguments to Judge Stein emphasizing that their use of news content is a transformative fair-use practice.

Reuters

• The filings cite more than 3.9 million copies taken from The Times and 7.3 million from the Register, Daily News and sister papers for model training.

Orange County Register

• Internal Microsoft data show an 83-93 % drop in clicks on the newspapers’ websites after AI summaries became available.

Reuters

• Survey data indicate that 28.6 % of former subscribers are more likely to ask an AI for news, while 36 % of Times subscribers say they no longer need the newspaper after using ChatGPT.

Orange County Register

• OpenAI’s internal metrics recorded 1 billion monthly ChatGPT users (May 2026) and roughly 1 million weekly prompts for local news.

Orange County Register

• Only 1.3 % of 45,000 Copilot conversations were identified as current-affairs queries.

Orange County Register

• The same spokesperson characterized Brent Hecht’s “astonishing theft” comment as an individual employee’s perspective, not a legal analysis representing Microsoft.

Reuters

• OpenAI declined to comment on the newly released filings, and a New York Times spokesperson also declined to comment.

Reuters

• The Justice Department’s brief supports the tech companies, arguing that large-scale AI training provides a “transformative public benefit” that outweighs any competitive harm.

The Cool Down

• Newspaper plaintiffs counter that the same AI outputs “misinform users” and flood the market with low-quality “pink-slime” news, a claim not addressed in the companies’ filings.

Orange County Register

• The filings do not disclose the methodology used to calculate the 83-93 % click-through decline, leaving a gap in understanding the precise impact on web traffic.

Orange County Register

• “Throughout this case, defendants insisted that these documents be treated as confidential so that the public could not see them,” — Steven Lieberman, attorney

Orange County Register

Judge Sidney Stein is expected to issue a summary-judgment decision that will determine whether the case proceeds to trial, potentially as early as 2027. The ruling will shape the legal standards for AI training on copyrighted material and could set precedent for future disputes involving other tech firms and content creators.

The Cool Down