Observed Signal · Sep 5, 2026 · Litigation · Source: techcrunch · Impact: 4/5 · Sentiment: Negative
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.
High importance as it involves major AI companies and multiple publishers, potentially setting legal precedents for AI training data usage.
Track OpenAI Signals & Market Shifts in Real-Time
Polaris7 autonomous intelligence agents track regulatory filings, primary sources, executive changes, and deal flow 24/7. Create your free Explorer workspace to monitor these entities.
Key Takeaways & Evidence Grounding
- The Seattle Times and Newsday filed a lawsuit against OpenAI and Microsoft on September 7, 2026.
- The lawsuit alleges unauthorized scraping of articles and use of copyrighted content to train AI models, bypassing paywalls.
- The publishers claim the practice diverts traffic and digital ad revenue, and raises concerns about AI hallucinations and removal of copyright management information.
- The lawsuit follows a similar case by The New York Times in 2023 and adds to the broader legal disputes between media and AI companies.
- Microsoft and OpenAI have previously funded journalism projects at The Seattle Times, and Microsoft has expressed a willingness to resolve the dispute.
Connected Companies & Entities
4 Entities mapped“The Seattle Times and Newsday are suing OpenAI and Microsoft over the use of their journalism to train AI....”
“The Seattle Times and Newsday are suing OpenAI and Microsoft over the use of their journalism to train AI....”
“The New York Times sued OpenAI and its partner/investor Microsoft over alleged copyright infringement in 2023....”
“The New York Times sued OpenAI and its partner/investor Microsoft over alleged copyright infringement in 2023....”
Ontology Mapping & Concepts
Related Market Signals & Shifts
Recent verified developments and strategic activity across this market segment.
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.
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 Managers Call AI Training 'Ridiculous Theft'
In a copyright lawsuit filed by The New York Times against Microsoft and OpenAI, internal documents reveal that senior Microsoft executives privately view AI training on copyrighted content as a massive theft of labor, despite public justifications. Brent Hecht, head of applied sciences at Microsoft, called it "astonishing theft of unprecedented scale," while OpenAI's ChatGPT chief Nick Turley admitted the technology poses an "existential threat" to news publishers. The documents also suggest that internal opinions about the "fair use" defense are skeptical, with concerns that prevailing on it would make the term meaningless. Microsoft executives, including CEO Satya Nadella, acknowledged under oath that chatbots can replace visits to original sources, leading to a potential "vicious circle" harming both models and the internet. The case, still ongoing, is a key precedent for whether AI training qualifies as fair use.
Track Real-Time Market Signals & Shifts
Set up custom watchlists to receive automated, evidence-grounded executive digests whenever material signals or shifts occur across your tracked landscape.