Inside Microsoft and OpenAI, worry about damaging the publishing industry

In a recent court filing unsealed in Manhattan federal court, executives from OpenAI and its major investor Microsoft admitted that large language models (LLMs) are undermining news publishers' business models through what they call a "doom loop." This loop involves LLMs using vast amounts of copyrighted content without permission, which then cannibalizes readership and revenue for the original publishers. An internal Microsoft document states this is an "unusual situation where an end-product threatens the economic foundations of its essential suppliers."

Executives like Brent Hecht, director of applied science at Microsoft, warned that AI models could harm both internet integrity and their own business by undermining news outlets’ sustainability. This admission comes as part of a long-running copyright infringement lawsuit filed by The New York Times against the companies over unauthorized use of copyrighted content for training LLMs like ChatGPT. The court documents reveal executives' private concerns that scraping millions of articles without consent amounts to "the largest theft of labor in human history." Despite these internal fears, Microsoft and OpenAI continue to defend their practices publicly by arguing they are protected under fair use laws since the AI transforms original content into new material.