AI Startup Perplexity Faces Lawsuits Over Copyright Infringement

The New York Times has filed a lawsuit against AI startup Perplexity AI, claiming it illegally copied millions of articles. The lawsuit alleges that Perplexity distributed and displayed journalists' work without permission, violating trademarks under the Lanham Act.

The Times argues that Perplexity's generative AI products create fabricated content, or hallucinations, and falsely attribute them to the newspaper by displaying them alongside registered trademarks. This suit is part of a larger trend, as Perplexity is facing similar allegations from other major media companies, including Dow Jones and the New York Post.

Reports indicate that Perplexity's business model relies heavily on scraping and copying copyrighted content, including paywalled material, to fuel its AI systems. In addition to media companies, tech firms like Amazon have also taken legal action against Perplexity, accusing it of covertly accessing user accounts.

Despite having raised about $1.5 billion over the past three years, including a recent $200 million funding round that valued the company at $20 billion, Perplexity's legal challenges pose significant risks to its operations and the broader AI startup landscape.

The ongoing lawsuits highlight the escalating tensions between AI technology and intellectual property rights, raising ethical questions about the use of AI in content generation and its implications for startups in the AI space.