Perplexity AI logo is seen in this illustration taken January 4, 2024. REUTERS/Dado Ruvic/Illustration
Dec 5 (Reuters) - The New York Times filed a lawsuit against Perplexity AI on Friday, claiming that the artificial intelligence startup was copying, distributing and displaying millions of its articles without permission to power its generative AI products.
The startup has become a target of multiple legal disputes and faces similar accusations from a number of publishers as it tries to aggressively carve out a share of the hyper-competitive market for generative AI tools.
The Times also claimed that the startup's generative AI products created fabricated content, or "hallucinations," and falsely attributed them to the newspaper by displaying them alongside its registered trademarks.
It said that Perplexity's business model relied on scraping and copying content, including paywalled material.
"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," NYT spokesperson Graham James said in a statement.
The NYT is seeking damages, injunctive relief and other equitable remedies to prevent Perplexity from continuing its alleged unauthorized use of content.
Perplexity was also sued by the Chicago Tribune on Thursday.
The startup's head of communication, Jesse Dwyer, dismissed the lawsuits, saying it was an unsuccessful tactic used by publishers against emerging technologies.
Perplexity had previously said that it was not scraping data for building foundation models, but rather indexing web pages and providing factual citations.
The lawsuit, filed in the U.S. District Court for the Southern District of New York, comes more than a year after the NYT sent a cease and desist notice to Perplexity.
It is also the latest salvo in a bitter ongoing battle between publishers and tech companies over the use of copyrighted content without authorization.
In October, social media company Reddit sued Perplexity in New York federal court, accusing it and three other companies of unlawfully scraping its data.
The San Francisco-based startup, which is valued at about $20 billion, is also facing lawsuits from Encyclopedia Britannica and media baron Rupert Murdoch's Dow Jones and the New York Post.
The NYT, which has allowed Amazon.com to use its editorial content for AI products such as Alexa, is also tussling with ChatGPT-maker OpenAI.
Reuters reported last year that multiple AI companies were bypassing a web standard used by publishers to block the scraping of their data used in generative AI systems.
NYT shares were up 1.8%.
(Reporting by Jaspreet Singh in Bengaluru, additional reporting by Arnav Mishra in Bengaluru; Editing by Arun Koyyur and Anil D'Silva)
