Did OpenAI Pull Off the Biggest IP Heist of All-Time?

VCR recordings. Book digitization. The use of existing code to build a new operating system.

The legality of some of the most consequential technology and products in the last century have come down to a singular question: Are they protected under fair use, the legal doctrine allowing the use of copyrighted works without a license?

Now, that question has become the central battleground in landmark lawsuits between publishers, studios and recording companies against artificial intelligence companies over large language models. In the near future, these platforms are positioned to break through as the gateway to the internet — and information — to billions of people across the world. Related Stories Business Gen AI Founder: Tools Won't Replace Live Film Production - Yet Reporter's Notebook An "Interview" With Tilly Norwood Proves Absurd and Underwhelming

If you ask these AI firms, they’ll say the secret sauce to their technology was innovation. The New York Times and eleven other publishers suing Microsoft and OpenAI over the use of their articles to train AI systems have a different answer: theft.

“Millions of people around the world will soon consider large models ‘hoovering up’ all their work to be an astonishing theft of unprecedented proportions,” said a 2023 internal Microsoft document, which noted that “almost no one intended for content they created to be used in this fashion, nor are they compensated for its use.”

The message was uncovered on Thursday in newly unsealed court documents detailing substantial concern within Microsoft and OpenAI over the ways in which they were developing their AI systems at the expense of publishers. They provide perhaps the most revealing indication yet that executives at the companies knew they may been have running afoul of intellectual property laws as they developed their technology.

The ingestion of copyrighted works is described by Microsoft Director of Applied Science Brent Hecht as “an astonishing theft of unprecedented proportions” and potentially “the largest theft of labor in human history,” the documents said.

At this stage of the litigation, OpenAI and Microsoft bear the burden of proving that their conduct constitutes fair use, which turns on a four-factor balancing test. The first prong asks what the copyrighted material was utilized for, including whether the use was commercial and whether it transformed the material for a new purpose.

Here, Supreme Court precedent holding that an “evasive motive” and violations of industry ethical standards undercuts a fair use defense could come into play. Consider an exchange between an OpenAI engineer and president Greg Brockman, who was told of a “hack to get around [the] nytimes paywall” as the company explored ways to scrape the site.

The response indicates that an executive knew of a technical method to circumvent a publisher’s access restriction and employed it at the company.