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Here's what's happening: The New York Times just sued Perplexity AI for massive copyright infringement. But here's the kicker—they're just the latest in a growing dogpile that includes The Wall Street Journal, Reddit, Amazon, Japanese newspapers, and even the Encyclopedia Britannica.

What is going on?

Perplexity's pitch sounds innocent enough: it's an AI-powered answer engine that searches the web and gives you direct answers instead of links. Skip the clicks, get straight to the facts. Sounds helpful, right?

The thing is, those "facts" come from somewhere. And according to publishers, that somewhere is their paywalled content—copied without permission, stripped of context, and served up as if Perplexity did the work.

The Times alleges Perplexity scraped millions of articles, including premium subscriber-only content, and reproduced them in AI-generated summaries. Sometimes verbatim. Sometimes with fabricated details ("hallucinations") that still get attributed to The Times, damaging their reputation while Perplexity profits.

Listen, this isn't just about one lawsuit. Since August, Perplexity has been sued by:

That's a $20 billion startup facing existential legal threats from multiple continents.

Perplexity's defense? They compare themselves to past innovations—radio, TV, the internet—that publishers initially resisted. "Publishers have been suing new tech companies for a hundred years," their spokesperson said. "Fortunately it's never worked, or we'd all be talking about this by telegraph."

But there's a difference between indexing content (what Google does) and replacing it entirely. The Times struck a licensing deal with Amazon for its AI. OpenAI has agreements with AP and Vox Media. A legal market exists—Perplexity just chose not to participate.

Instead, they launched a revenue-sharing program after the backlash, offering publishers scraps while building their entire business on content they never paid for.

If publishers win, AI companies will need licenses to summarize paywalled content. If Perplexity wins, the subscription model for journalism collapses—why pay The Times when an AI gives you their reporting for free?

The Chicago Tribune case is especially interesting because it targets real-time content retrieval, not just training data. If courts rule that even accessing articles to generate answers violates copyright, every AI answer engine—from ChatGPT to Google's Gemini—will need to rethink how they operate.

You know what's fascinating? Perplexity isn't wrong that their product is useful. Users love getting answers without clicking through. But "useful" and "legal" aren't the same thing.

We're watching courts decide whether AI companies can build billion-dollar businesses on other people's work, or whether innovation requires actually negotiating with the people whose labor you're monetizing.

The answer will define the next decade of AI development.