News Corp's subsidiaries, Dow Jones and the New York Post, have sued California-based AI search firm Perplexity for copyright infringement. This legal action, filed on Monday, alleges that Perplexity duplicated vast amounts of content from News Corp businesses, including Wall Street Journal stories, in order to create AI-driven search replies. The issue exemplifies recurring disputes between traditional media outlets and AI businesses over the unauthorised use of intellectual content to train AI models.
Dow Jones and the New York Post, both controlled by Rupert Murdoch's News Corp, claim that Perplexity obtained and exploited their copyrighted content without permission. The lawsuit claims Perplexity of using their intellectual property for commercial gain, portraying itself as a rival by offering users with answers based on private information without compensating content providers.
The complaint also stated the limited collaboration between Perplexity and media businesses. According to the complaint, Dow Jones and the New York Post approached Perplexity in July to discuss potential licensing options for AI-driven summaries, but received no response. However, Perplexity claims to have responded to News Corp's July letter on the same day, with CEO Aravind Srinivas expressing surprise at the lawsuit. He revealed at the recent WSJ Tech Live conference that Perplexity had been open to conversations with publishers since early summer, but the lawsuit halted any progress.
Why Are Media Companies Concerned?
Since AI's general acceptance with tools such as ChatGPT, news publishers have expressed worries over unlicensed usage of their content by AI models that mine the internet, including paywalled sites, for data. Many publishers say that because these tools summarise and repackage content for consumers, AI systems are bypassing their websites, reducing traffic and losing them of money.
Perplexity, which has garnered funding from prominent investors such as Nvidia and Amazon's Jeff Bezos, is facing similar allegations from publications such as the New York Times, Forbes and Condé Nast, who claim it is distributing content without proper permission.
The action against Perplexity is pointing out a broader dispute in the AI and media industries, with corporations such as News Corp seeking for stronger legal protections and guidelines for AI's usage of proprietary content. For example, while AI platforms such as Perplexity claim that their models employ web-sourced information to provide summaries, publishers say that direct summaries eliminate the need to visit original sites, limiting their brands' visibility.
Current Legal And Industry Approaches
Legal disputes and talks are becoming more prevalent as publishers seek to limit AI models based on unauthorised data. Some businesses are seeking litigation, while others are investigating collaborative models. Perplexity, for example, established a revenue-sharing arrangement earlier this year in response to the same concerns. Publishers such as Fortune, Time and Entrepreneur have joined Perplexity's program, which aims to reimburse content creators with a portion of the money earned by their AI search tool.
What Is Perplexity AI?
Perplexity AI, a conversational AI search engine was introduced in 2022 by former OpenAI researcher Aravind Srinivas. The platform intends to reinvent internet search by combining AI-powered question-and-answering with real-time web data retrieval. This strategy differs from the typical search engine concept by providing synthesised answers to enquiries while mentioning credible internet sources to increase transparency. Perplexity has grown to attract millions of people who value its direct-answer structure and user-friendly experience.
How Perplexity AI Operates?
Perplexity's AI model collects and synthesises information from a variety of sources to provide brief, conversational responses. Perplexity, unlike ordinary search engines, provides directly created summaries rather than lists of links. Real-time information retrieval enables consumers to receive up-to-date responses to recent occurrences, while its conversational structure aims to increase accessibility. Perplexity's commitment to source attribution also promotes openness by linking back to original sources.
Text summarisation, real-time data access and an increased knowledge base in sectors like as science, technology and the arts are among the key aspects. Perplexity's answers are designed for ease, and its conversational tone improves reading, making it an option for customers seeking a quick, digestible search experience. This format also makes it a competitor to both traditional search engines and other AI-powered platforms, such as ChatGPT and Google's Gemini.
Business Model And Strategic Positioning
To solve copyright and income issues, Perplexity has formed revenue-sharing agreements with chosen publishers. This method aims to acknowledge content ownership while setting cooperative arrangements. The company's business strategy is also supported by large venture financing, with a valuation of around USD 3 billion as of 2024, with plans to increase this figure further in future fundraising rounds.
Perplexity’s answer-first approach has garnered a large and active user base, with around 15 million monthly active users as of 2024. User engagement has driven rapid growth, particularly among younger users between 18-34. With approximately 2 million daily visits, Perplexity’s popularity is reflected in its frequent app downloads and extended session durations, underscoring a positive reception to its search style.
What’s In For The Future?
Perplexity is likely to continue pursuing publisher partnerships, with an emphasis on content licensing to stabilise its legal positioning. Plans for international growth, further feature expansion, and language localisation also suggest a push toward becoming a global search competitor. As it refines its AI-based features, Perplexity is also poised to impact the AI-search arena by offering an alternative to traditional search engines while navigating ongoing challenges in content compliance.
Perplexity’s lawsuit could set a precedent for how AI tools interact with proprietary content, potentially changing the responsibilities of AI companies in licensing intellectual property. The outcome may influence other AI developers in deciding whether to form partnerships with publishers or risk legal challenges. The case also has brought up the media industry’s broader concern about AI’s effect on information accessibility and the traditional business models of news organisations.
