Dow Jones and New York Post Sue AI Startup Perplexity, Alleging ‘Massive’ Copyright Infringement

News Corp‘s Dow Jones & Co., publisher of the Wall Street Journal, and the New York Post have sued Perplexity, a startup that calls itself an “AI-powered Swiss Army Knife for information discovery and curiosity,” alleging copyright infringement.

“Perplexity is a generative artificial intelligence company that claims to provide its users accurate and up-to-date news and information in a platform that, in Perplexity’s own words, allows users to ‘Skip the Links’ to original publishers’ websites,” the companies said in the federal lawsuit, filed Monday. “Perplexity attempts to accomplish this by engaging in a massive amount of illegal copying of publishers’ copyrighted works and diverting customers and critical revenues away from those copyright holders. This suit is brought by news publishers who seek redress for Perplexity’s brazen scheme to compete for readers while simultaneously freeriding on the valuable content the publishers produce.”

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The lawsuit alleges that in July 2024, Dow Jones and the Post sent a letter to Perplexity “putting it on notice of the legal issues raised by Perplexity’s unauthorized use of Plaintiffs’ copyrighted works and offering to discuss a potential licensing deal. Perplexity did not bother to respond.”

Reps for Perplexity did not immediately respond to a request for comment.

Meanwhile, the New York Times last week sent Perplexity a cease-and-desist notice demanding the company stop using its content, asserting that the Perplexity AI system infringes its copyrights, Reuters reported. The Times also has sued OpenAI and Microsoft, making similar copyright-infringement allegations.

Perplexity is looking to raise a round of around $500 million in new funding, seeking to more than double its valuation to about $8 billion, the Wall Street Journal reported Sunday. Perplexity’s existing investors include Amazon founder Jeff Bezos, SoftBank Group Corp.’s Vision Fund 2 and chip maker Nvidia, whose fortunes have boomed on strong demand for AI applications.

Dow Jones and the New York Post filed the lawsuit Oct. 21 in the U.S. District Court for the Southern District of New York. A copy of the lawsuit is available at this link.

The lawsuit seeks to enjoin Perplexity from “the unlawful copying of Plaintiffs’ copyrighted content without Plaintiffs’ authorization” and statutory copyright infringement damages, “up to and including $150,000 for each infringement, actual damages, and Perplexity’s profits, for each infringement including each unauthorized digital copy or other content derived from Dow Jones’s and NYP Holdings’ copyrighted works,” per the lawsuit.

News Corp CEO Robert Thomson, in a statement about the lawsuit, said: “Perplexity perpetrates an abuse of intellectual property that harms journalists, writers, publishers and News Corp. The perplexing Perplexity has willfully copied copious amounts of copyrighted material without compensation, and shamelessly presents repurposed material as a direct substitute for the original source. Perplexity proudly states that users can ‘skip the links’ — apparently, Perplexity wants to skip the check.”

Earlier this year, News Corp entered into an agreement with OpenAI under which the AI company will pay News Corp licensing fees potentially worth more than $250 million over five years.

“We applaud principled companies like OpenAI, which understands that integrity and creativity are essential if we are to realize the potential of artificial intelligence,” Thomson said. “Perplexity is not the only AI company abusing intellectual property and it is not the only AI company that we will pursue with vigor and rigor. We have made clear that we would rather woo than sue, but, for the sake of our journalists, our writers and our company, we must challenge the content kleptocracy.”