A landmark copyright lawsuit the New York Times filed in 2023 against OpenAI and Microsoft entered a critical new phase on Friday, when all three parties submitted their formal written arguments to the court as they seek a favorable ruling ahead of a potential trial.
Why this matters
A decision for the Times could upend business models that currently power large parts of the AI industry. Conversely, a ruling for OpenAI and Microsoft could represent a major setback for publishers by weakening their ability to control and monetize how their content is scraped and used by AI companies.
The parties' central claims
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The New York Times, in its motion for summary judgment, contends that OpenAI and Microsoft copied its journalism at scale to build commercial substitutes, which it says violates copyright law.
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OpenAI argues existing copyright law and precedents permit tech companies to collect publicly available works to train large language models, and that factual reporting is not protected by copyright. It also cited studies it says show ChatGPT outputs do not create commercial substitutes for the Times' work.
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Microsoft raised similar points regarding its Copilot product, asserting that AI outputs do not function as market replacements for the Times' journalism.
Legal precedents and points of contention
OpenAI's filing points to two recent California federal-court decisions, Kadrey v. Meta and Bartz v. Anthropic, where courts found use of copyrighted works to train AI models constituted "fair use" because the training was deemed transformative.
The Times does not dispute the factual findings in those cases but argues they are distinguishable: those plaintiffs did not demonstrate that AI outputs competed with their products or created market substitutes for their journalism. The Times also argues that since its suit was brought in a New York federal court, binding copyright precedents set by higher courts — specifically the Supreme Court and the Second Circuit — should govern this case rather than the recent lower-court rulings in California.
Broader implications and political context
The case is being watched globally as a potential landmark that could shape how AI developers may lawfully use large collections of digital content. It carries particular resonance in U.S. policy debates: the Trump administration has publicly linked national security and economic priorities to the development of AI infrastructure.
On Thursday, the U.S. Department of Justice filed a brief supporting OpenAI, arguing that training large language models on millions of digital works provides a transformative public benefit that outweighs potential competitive harms to the publishing industry.
What comes next
District Judge Sidney Stein is expected to decide in the coming months whether all or key portions of the case should proceed to trial next year. The parties have now laid out their written positions, and the court's rulings on these motions will significantly influence legal standards for AI model training and the enforceability of publishers' copyrights.
Disclosure
The reporting source notes that Axios and OpenAI have a licensing and technology agreement that permits OpenAI access to part of Axios' story archives while supporting Axios' expansion into local markets and providing some AI tools; Axios maintains editorial independence.
