Microsoft director called AI scraping ‘the largest theft of labor in human history,’ while OpenAI head brands ChatGPT an ‘existential threat’ to publishers — revelations come from legal briefs filed in NYT lawsuit

The New York Times sued OpenAI and Microsoft for copyright infringement in late 2023, with the case apparently still ongoing almost three years later. Now, the publication’s legal team has asked the court for a summary judgment after it filed a revealing legal brief based on statements and documents from the defendants. According to 404 Media, these documents remain sealed or redacted at the request of both companies, with the revelations showing potentially damaging statements from their leadership, including claims AI scraping is the biggest theft of labor in human history and an existential threat to publishers.

The brief cited an internal memo dated January 2023 by Microsoft director of Applied Science Brent Hecht, where he allegedly said, “Millions of people around the world will soon consider large models ‘hoovering up’ all their work to be an astonishing theft of unprecedented proportions” and also called it “the largest theft of labor in human history.” Another Microsoft document was cited saying, “almost no one intended for content they created to be used in this fashion, nor are they compensated for its use.”

As ChatGPT surged in popularity throughout 2023, the software giant’s own data revealed that Copilot dropped click-through rates for The New York Times by as much as 93% compared to Bing search. Another memo by the Applied Science director called it a “doom loop” and said it would “hurt the performance of our models and the entire web at the same time.” The NYT brief quoted Hecht from the document, saying, “It is highly unusual that an end-product threatens the economic foundations of its essential suppliers, but that is the situation we have created for our LLM business with respect to its ‘content supply chain.’”

OpenAI Head of ChatGPT Nick Turley said in internal communications that the AI chatbot is an “existential threat” to publishers as they are “largely substitutive” and “will get more and more substitutive as they get better,” while another OpenAI engineer testified that “no matter how prominently we show the links, users won’t click.” Nick Ryder, another OpenAI researcher, told company president Greg Brockman about a “hack to get around nytimes paywall,” to which he replied, “ah nice.”

AI companies argue that scraping the internet for data to feed to their models is “fair use,” with one court agreeing that Anthropic’s use of published material falls under this category. The law defines this as “criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research.” Some of the factors that determine whether a particular use falls under “fair use” include “(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.”

However, all these revelations in NYT’s brief could complicate OpenAI’s fair use defense, especially as it shows that the leadership of both companies are aware of the possible market repercussions of AI scraping. Microsoft CEO Satya Nadella said in a deposition from earlier this year that “anything that is paywalled should be licensed by anyone who wants to use it…for grounding or training” and that if he “had been made aware that OpenAI has scraped and trained on information that was behind a paywall,” the company would have required OpenAI “to retrain its models.”

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