Microsoft exec called AI scraping the “largest theft of labor in human history”

“Astonishing theft”

Microsoft, OpenAI emails reveal fear of AI “doom loop” killing news orgs.

For years, Microsoft and OpenAI have fought to keep certain information out of the public eye in their fight with news organizations that have accused the AI firms of teaming up to violate copyright laws by stealing tons of news content to train AI.

However, now the details that should never have been marked confidential are starting to leak. In a motion for summary judgment that was unsealed Thursday from news plaintiffs led by The New York Times, internal documents are exposed that news groups alleged show exactly how Microsoft and OpenAI viewed the threat to news before unleashing new AI products like ChatGPT and Copilot.

Perhaps most explosively, Microsoft Director of Applied Science Brent Hecht repeatedly warned in documents that scraping news for AI training was “an astonishing theft of unprecedented proportions,” calling it perhaps the “largest theft of labor in human history,” news orgs said. In another document, Hecht contradicted Microsoft and OpenAI’s argument that training AI on news content is fair use, suggesting that the plan to widely scrape news made “a complete mockery of the idea of ‘fair use.’”

Over at OpenAI, ChatGPT head Nick Turley wrote in an internal message that publishers would face an “existential threat” from commercial products trained on news content that can be used to substitute news providers. One Microsoft document even described a “doom loop,” news orgs said, “that will hurt the performance of our models and the entire web at the same time.”

“It is highly unusual that an end-product threatens the economic foundations of its essential suppliers, but that is the situation we have created for our LLM business with respect to its ‘content supply chain,’” that document said.

Data from both firms shows that this prediction was accurate. Microsoft recorded 83–93 percent drops in click-through rates for some news plaintiffs, and 51–94 percent drops for others. Add to that reporting on low click-through rates from ChatGPT search results and news organizations’ own reporting on traffic declines. Suddenly, it becomes easier to see how declining news revenue could ultimately rob chatbots of the abundant streams of reliable information that supposedly makes them such groundbreaking tools.

Meanwhile, “almost no one intended for content they created to be used in this fashion, nor are they compensated for its use,” Hecht acknowledged in a Microsoft document.

News organizations say they’re ready to go to trial because there’s so much “compelling evidence of substitution.” If they can prove that chatbots are replacing them in their own markets, while serving to spit out excerpts of articles verbatim, they think that one-two punch may eviscerate Microsoft and OpenAI’s fair use arguments.

“The future not just of journalism but of responsible AI too depends on preserving incentives for humans to produce the creative works on which a healthy society depends,” news groups argued.

Chatbots are “largely substitutive, period”

Under oath, Microsoft CEO Satya Nadella testified that AI companies shouldn’t be violating news sites’ terms of use by dodging paywalls. But over at OpenAI, internal messages showed that when a staffer, Nick Ryder, informed President Greg Brockman that “a hack” was found for OpenAI crawlers “to get around” the NYT paywall, Brockman replied, “Ah, nice.”

Nadella also acknowledged that chatbots have served as substitutes for news platforms, describing the chatbot as stealing clicks from news sites by “giving you the information right there on the website on the AI platform versus needing to go to the underlying source.”

There’s consensus on that at OpenAI, where a software engineer said in an internal message that “no matter how prominently we show the links, users won’t click.”

OpenAI’s Turley agreed that there is “no good reason to click” when the chatbot provides information, the motion said. He also seemingly suggested that the doom loop was already in motion, describing chatbots as “largely substitutive, period” and predicting that they “will get more and more substitutive as they get better.”

News groups argued that insiders’ own statements should be damning.

“With respect to outputs that are substantially similar to training or grounding sources, courts have rejected claims that copying news articles to provide a product that substitutes for demand for news is fair use,” news groups argued.

Microsoft disclaims exec’s comments

News groups tried many different tactics to test if Microsoft and OpenAI products would output their news articles verbatim. Their motion shows they went further than early strategies where they would ask chatbots to provide access to entire news stories by repeatedly asking “what’s the next line?”

In some cases, news organizations found that chatbots would generate long excerpts of articles when users requested summaries of articles. Other flagged outputs were generated by asking for key bullet points of articles. Particularly successful were prompts requesting that chatbots “rate the bias” of news articles. Chatbots also reproduced portions of articles if users asked them to pick any article off a certain site’s homepage.

In their motion, news plaintiffs have only asked the court to rule on infringed articles where outputs “demonstrate extensive verbatim overlap,” because they’re confident that the “substitutive purposes of defendants’ copying weigh against fair use.” Legal concerns with other articles will be raised at trial, they said.

OpenAI did not immediately respond to Ars’ request to comment.

However, a Microsoft spokesperson defended Microsoft’s AI products as a transformative fair use that don’t substitute for news sites. The spokesperson said that Nadella’s testimony touched on “broad principles and changes underway in how people find and consume information,” which were merely “observations” that “should not be confused with conclusions about copyright questions before the Court, which Microsoft addresses in its filings.”