The Breaker Times

Perplexity bills itself as an AI-empowered direct alternative to Google.

Whereas Google operates a search engine, Perplexity aims to operate an AI answer engine that allows users to “ask any question.” It then “searches the internet to give you an accessible, conversational, and verifiable answer,” per the company FAQ. If that sounds like an AI-enhanced version of search, you’d be right.

There’s no question that it’s been an unabashed hit since its launch in 2022. But it now finds itself facing litigation.

News Corp has officially filed a lawsuit against Perplexity AI over accusations that the startup has committed copyright infringement on a “massive scale.” The suit, filed Monday, alleges that Perplexity lifted news, opinions and analysis directly from its Wall Street Journal and New York Post publications. This isn’t the first time the AI app has been under fire for its business practices, and it’s likely not going to be the last.

A new kind of search

Perplexity doesn’t use a proprietary AI, as Anthropic, OpenAI, or Google do. Those models have their own legal troubles, but Perplexity is different in that it relies on open-source and commercially available models to process the information it scrapes from the public web.

Perplexity’s value proposition is instead to insert itself between search and content producers as a middleman, training its AI on copyrighted content that its chatbot will then regurgitate (oftentimes verbatim, according to the lawsuit) to its own paying customers, without compensating or attributing the original content producers.

Its summaries effectively enable users to “skip the links” that Google Search provides and access high-quality information directly through its chatbot. And therein lies the problem.

At least in theory, Google Search and news sites have had a symbiotic (if tenuous) relationship with Google earning ad revenue from its search results while driving traffic to the sites. Publishers of content earn revenue through ads placed on the post page itself, resulting in both sides getting paid, traffic flowing freely to independent sites, and few paywalls to get in the way.

That might sound like a harmonious alliance than it really is, especially considering a recent ruling by the Department of Justice. But it’s the system that has led to the internet we all enjoy today.

Perplexity is something new. By its nature as an answer engine, Perplexity does not drive click traffic to independent sites. It’s not hard to see why a company like News Corp could see Perplexity as a true enemy of its operations.

The argument hinges on far more than just dealing with some new competition, though.

Perplexity’s history of sticky-fingered behavior

The company has already come under fire from publishers and content creators multiple times in 2024 alone. In June, for example, Forbes chief content officer Randall Lane accused Perplexity of “willful infringement” of Forbes’ reporting.

According to Lane, the chatbot tried to lend credence to the story it presented by citing other reports, which ended up being just aggregated stories covering the original Forbes’ post. That is, if the New York Times publishes a post and The Verge and TechCrunch and Digital Trends all cover it, Perplexity’s AI would cite all those individual posts as citations for the NYT piece, which is not how citation works. What’s more, the AI then sent a push notification to its subscribers imploring them to read its regurgitated report, along with an AI-generated podcast and YouTube video about it.

Lane noted that the video “outranks all Forbes content on this topic within Google search.” Perplexity CEO Aravind Srinivas responded on Twitter that “we agree with the feedback you’ve shared that it should be a lot easier to find the contributing sources and highlight them more prominently.”

Forbes also claims that Perplexity helped itself to an exclusive (and paywalled) story about ex-Google CEO Eric Schmidt’s efforts to build militarized drones. Perplexity’s summary reportedly lifted entire passages verbatim and was subsequently viewed more than 30,000 times. “Our reporting on Eric Schmidt’s stealth drone project was posted this AM by @perplexity_ai,” Forbes Executive Editor John Paczkowski wrote on X. “It rips off most of our reporting. It cites us, and a few that reblogged us, as sources in the most easily ignored way possible.”

https://twitter.com/JohnPaczkowski/status/1799135156051255799

In July, Conde Nast sent a cease-and-desist letter to Perplexity, again accusing it of lifting content from The New Yorker, Vogue, and Wired — the latter of which published its own damning report on Perplexity’s actions.

“According to server logs, that same IP [believed to belong to Perplexity’s web crawler] visited properties belonging to Condé Nast, the media company that owns Wired, at least 822 times in the past three months,” Tim Marchman wrote for Wired. He notes that figure is “likely a significant undercount, because the company retains only a small portion of its records.”

The New York Times went on to send a cease and desist letter of its own to Perplexity in October. The publication claims that the startup’s actions in scraping and summarizing its stories violate copyright law. The letter demands that Perplexity “immediately cease and desist all current and future unauthorized access and use of The Times’s content.”

Too little, too late?

Don’t expect Perplexity’s legal troubles to diminish any time soon. Even with general decline of online journalism in recent decades, there is still way too much money to be made by industry heavyweights at Condé Nast and New Corps to simply roll over.

News Corp’s lawsuit also alleges that Perplexity routinely hallucinated and misrepresented facts in its answers, “sometimes citing an incorrect source, and other times simply inventing and attributing to Plaintiffs fabricated news stories.”

But time may not be on their side. Condé Nast CEO Roger Lynch warned in January that, due to the enormous lead times needed to litigate AI, “many media companies will go out of business” before they see their day in court. The suit also notes that News Corp reached out to Perplexity about its behavior in July. The startup reportedly “did not bother” to respond.

Meanwhile, Perplexity, which is backed by Jeff Bezos, is reportedly in talks for a $9 billion valuation in a new funding round.