News Industry Faces Existential Threat from Uncompensated Use by AI Giants

Newly unredacted filings in an ongoing copyright case between The New York Times and OpenAI/Microsoft have shed light on internal documents that describe news as an 'unpriced input'.

Two separate documents, one from January 2023 and the other from January 2024, were written by Brent Hecht, a Microsoft Director of Applied Science. The first document described the use of Times content in training generative AI models as 'an astonishing theft of unprecedented proportions' and 'the largest theft of labor in human history.'

The second document stated that it was 'highly unusual that an end-product threatens the economic foundations of its essential suppliers', implying that news organizations are being used without compensation.

Satya Nadella, Microsoft's CEO, gave deposition testimony stating that 'anything that is paywalled should be licensed by anyone who wants to use it...for grounding or training', which was described as an 'observation' rather than a concession.

The plaintiffs allege that OpenAI and Microsoft knew they were doing something wrong, but the documents do not prove this. The key insight is that the internal documents describe an economic relationship in economic terms, highlighting the structural problem of news being used without compensation.