Perplexity Boss Surprised After New Corp Sues

News Corp, the media giant that owns titles such as The Wall Street Journal, Dow Jones and the New York Post, is suing another artificial intelligence (AI) startup.

Perplexity is a well-funded AI search startup that offers a search-focused AI chatbot. The firm is backed by Amazon founder Jeff Bezos and GPU giant Nvidia.

Earlier this week News Corp (via the Dow Jones and New York Post) filed a lawsuit, alleging that Perplexity “allows users to ‘skip the links’ to original publishers’ websites. Perplexity attempts to accomplish this by engaging in a massive amount of illegal copying of publisher’s copyrighted works and diverting customers and critical revenues away from those copyright holders.”

Lawsuit allegations

News Corp then alleges in its complaint that Perplexity has raised significant capital to build a so-called “answer engine.”

The startup essentially trains its AI search models using content from the web, allowing it to respond to user queries with a summary of its sources. This, the lawsuit alleges, allows users to “skip the links” to online articles, which in turn allegedly impacts revenues for copyright holders.

News Corp in its lawsuit alleged the Perplexity answer engine “copies on a massive scale, among other things, copyrighted news content, analysis, and opinion as inputs into its internal database. It then uses that copyrighted news content to generate responses to users’ queries that are intended to and do act as a substitute for news and other information websites.”

News Corp revealed that in July 2024 it “sent a letter to Perplexity putting it on notice of the legal issues raised.”

However it alleges that “Perplexity did not bother to respond.”

It noted that other AI companies have engaged with News Corp and other publishers, that resulted in “legitimate market-based licensing solutions,” pointing to the recent partnership with OpenAI as an example.

News Corp further alleged that “generative AI technology can be developed in two ways. It can be developed legally by recognising the legitimate rights of copyright holders and by including in the AI business model the legitimate costs and benefits of licensing the coprighted material, or it can be developed illegally by stealing copyright material. Perplexity has elected the illegal approach…”

News Corp says it is seeking “damages, injunctive relief, and other equitable relief under the Copyright Act of 1976.”

Surprised Perplexity

But Perplexity CEO Aravind Srinivas was quoted by Reuters at the WSJ Tech Live conference on Wednesday as saying he was “surprised” by the lawsuit.

Srinivas reportedly said the publishers reached out to Perplexity “around June” and the startup responded that it was open to talking to them.

Other media outlets such as Wired and Forbes have also reportedly accused Perplexity of scraping content without permission, and last week the New York Times (which is also suing OpenAI and Microsoft) reportedly sent a cease and desist letter to Perplexity to stop using its content.

However Perplexity has also reportedly entered into some payment agreements with the likes of Time and Fortune.