New York Times Takes AI Startup Perplexity to Court Over Copyright Claims
The New York Times filed a copyright infringement lawsuit against Perplexity AI on December 5, 2025. According to CNBC, the suit was filed in the Southern District of New York. The newspaper accuses Perplexity of unlawfully scraping its content to power the AI startup's search products.
The complaint claims Perplexity generates outputs that are identical or substantially similar to Times content. The lawsuit also alleges that Perplexity's AI sometimes fabricates information and falsely attributes it to the Times. This damages the newspaper's brand reputation, according to the filing.
The Times sent multiple cease-and-desist demands to Perplexity over 18 months. The company continued using Times content without reaching an agreement. "We firmly object to Perplexity's unlicensed use of our content," said Graham James, a Times spokesperson.
Why This Matters
The lawsuit threatens Perplexity's core business model and revenue streams. The AI startup relies on retrieval-augmented generation technology to crawl websites and deliver real-time answers. The Times argues this approach bypasses its paywall and reduces subscription revenue.
Perplexity faces mounting legal pressure from multiple publishers simultaneously. The Chicago Tribune filed a similar lawsuit on December 4, 2025. News Corp, which owns The Wall Street Journal, sued Perplexity earlier in 2025. Japanese publications Nikkei and Asahi Shimbun also brought copyright claims against the startup.
The Times represents the most powerful media voice in this growing legal battle. The newspaper's previous lawsuit against OpenAI and Microsoft set industry precedents. Publishers view these legal actions as leverage to force licensing agreements with AI companies.
Industry Implications
The wave of lawsuits reflects a broader shift in how content creators approach AI firms. TechCrunch reports that publishers now use legal threats as negotiation tools. Many outlets simultaneously pursue lawsuits while negotiating licensing deals with other AI companies.
Perplexity has attempted to address these concerns through its Publishers' Program. The company offers revenue sharing to participating outlets like Gannett and Fortune. However, major publishers including the Times have rejected this approach. They demand proper licensing agreements with guaranteed compensation.
The legal landscape is evolving rapidly with mixed court rulings. In September 2025, NPR reported that Anthropic agreed to a $1.5 billion settlement with authors. This represents the largest public copyright recovery in AI history. The settlement may set precedents for how courts view AI training on copyrighted material.
Perplexity dismisses the legal threats with historical comparisons. "Publishers have been suing new tech companies for a hundred years," said Jesse Dwyer, the company's communications head. The startup has raised more than $1.5 billion in funding from investors including Nvidia. According to TechCrunch, Perplexity reached a $20 billion valuation in September 2025. The company's annual recurring revenue approaches $200 million.
The conflict highlights fundamental questions about AI's relationship with content creators. Copyright law was not designed for systems that can instantly access and synthesize vast amounts of information. Courts must now determine whether AI training and output generation constitute fair use. The outcomes will shape the economic viability of both journalism and AI development.
Further Reading
For deeper insights into global adoption trends, our Alternative Financial Systems Index tracks regulatory frameworks and adoption metrics across 50 countries. The index provides comprehensive analysis of how governments worldwide are responding to emerging technologies and their impact on traditional information systems.
