Observed Signal · Jun 28, 2026 · Litigation · Source: t3n · Impact: 4/5 · Sentiment: Negative
400 US Local Newspapers Sue OpenAI and Microsoft
Nearly 50 U.S. publishers that operate about 400 local newspapers have filed a joint lawsuit against OpenAI and Microsoft, alleging the companies systematically used publishers' content without permission to train AI models. The complaint, published via Bloomberg Law and reported by outlets including FAZ, claims the defendants scraped publisher websites — including paywalled content — removed author attribution, and enabled their models to reproduce articles verbatim. Plaintiffs seek damages and an end to the alleged practices, warning of a potential 'death blow' to local journalism. OpenAI denies the allegations, saying its models are trained on publicly available data and invoking the U.S. fair-use doctrine; OpenAI founder Sam Altman has previously acknowledged that training cannot occur without copyrighted material. The dispute is among roughly 120 pending copyright suits against AI operators in U.S. courts.
A high-profile copyright suit against major AI vendors (OpenAI and Microsoft) could set legal precedent on whether and how publishers' content may be used to train LLMs; outcomes would affect content licensing, publisher revenue models and AI training practices across the industry.
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Key Takeaways & Evidence Grounding
- Nearly 50 U.S. publishers representing about 400 local newspapers have joined a lawsuit against OpenAI and Microsoft.
- The plaintiffs allege systematic, unauthorized scraping of publisher content — including behind paywalls — removal of author attribution, and verbatim or near-verbatim reproduction by AI models.
- OpenAI denies the claims, stating its models are trained on publicly available data and citing fair use; Sam Altman has previously said training without copyrighted materials is not possible.
- Approximately 120 copyright lawsuits against AI operators are currently pending in U.S. courts; notable plaintiffs previously include The New York Times, CNN and Thomson Reuters.
Connected Companies & Entities
9 Entities mapped“Dozens of U.S. publishers operating about 400 local newspapers are jointly suing OpenAI and Microsoft....”
“Dozens of U.S. publishers operating about 400 local newspapers are jointly suing OpenAI and Microsoft....”
“Among the best-known plaintiffs are The New York Times, CNN and Thomson Reuters....”
“Among the best-known plaintiffs are The New York Times, CNN and Thomson Reuters....”
“Among the best-known plaintiffs are The New York Times, CNN and Thomson Reuters....”
“The article notes external content from TargetVideo GmbH supplements t3n.de's editorial offering....”
“This article was published on t3n, which reported on the lawsuit and related coverage....”
“An image in the article is credited as 'Zhenya Voevodina/Shutterstock.'...”
Related Market Signals & Shifts
Recent verified developments and strategic activity across this market segment.
Seattle Times and Newsday sue OpenAI and Microsoft over AI training
The Seattle Times and Newsday have filed a lawsuit against OpenAI and Microsoft, alleging that the companies used their copyrighted journalistic content without authorization to train AI models. The publishers claim that the companies systematically scraped articles, bypassing paywalls, to feed their systems, thereby diverting traffic and digital ad revenue. The lawsuit also raises concerns about AI-generated 'hallucinations' falsely attributed to the newspapers and the removal of copyright management information. It describes generative AI as 'a snake eating its own tail' that could destroy journalism. This case follows a similar lawsuit by The New York Times in 2023 and adds to the growing legal battles between media companies and AI firms. Notably, Microsoft and OpenAI have previously funded journalism projects at The Seattle Times. Microsoft expressed surprise but a willingness to resolve the dispute. The lawsuit was filed on September 7, 2026.
NYT-Opening Documents Reveal AI Scraping, Fair-Use Impact on Publishers
Newly unsealed documents in The New York Times' lawsuit against OpenAI and Microsoft reveal internal admissions that AI products are 'largely substitutive' and pose an 'existential threat' to publishers. Legal experts say this eviscerates the fair-use defense, especially given evidence of paywall circumvention, which may violate the DMCA. The filings could catalyze more publisher lawsuits and force AI companies into paid licensing markets. Executives from OpenAI, Microsoft, and other AI firms are shown acknowledging the commercial value of news content while using it without permission. The case, presided over by Judge Sidney Stein, may set precedent for AI training on copyrighted works, reshaping the terms of trade between AI and publishing.
Microsoft Exec Calls AI Scraping 'Largest Theft of Labor in Human History'
Newly unsealed filings in the New York Times' copyright lawsuit against OpenAI and Microsoft reveal internal admissions that AI training practices constituted theft. A Microsoft executive described AI scraping as 'the largest theft of labor in human history,' and OpenAI leadership acknowledged an 'existential threat' to publishers. The documents detail how the companies allegedly bypassed paywalls, stripped copyright notices, and built massive datasets from scraped news content. Microsoft's own data showed a 93% drop in click-through rates for The New York Times due to AI answer engines, threatening the economic foundations of publishers. These revelations challenge OpenAI's fair use defense and highlight the significant harm to the publishing industry.
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