The Times contends that OpenAI's practices undermine its readership and financial viability by enabling users to bypass paywalls through AI-generated responses that mimic its articles.

The judge's ruling allows core claims of copyright infringement to advance, which could result in damages of up to $150,000 for each willful violation.

OpenAI's legal team is preparing to defend its use of content under the fair use doctrine in court, asserting that their practices are permissible under U.S. law.

A federal judge has allowed The New York Times and other newspapers to move forward with a copyright lawsuit against OpenAI and Microsoft, concerning the use of their articles to train AI chatbots.

This ruling follows oral arguments presented in January 2025, with the judge indicating that a detailed opinion explaining his decision will be forthcoming.

The Times argues that OpenAI's use of its content fails to meet the 'transformative' standard required for fair use, as it merely reproduces original reporting.

The implications of this case extend beyond the parties involved, potentially affecting other AI companies and media publishers that rely on web-scraped content for training.

The outcome of this lawsuit could have significant implications for the news publishing industry, potentially forcing OpenAI into costly licensing agreements with news organizations.

Microsoft has opted not to comment on the ruling, while OpenAI welcomed the dismissal of some claims, emphasizing their reliance on publicly available data.

Concerns are growing among publishers that AI chatbots may summarize content in ways that diminish traffic to their websites, adversely affecting advertising revenue.

Judge Sidney Stein denied OpenAI's motions to dismiss several claims, including direct copyright infringement and trademark dilution, while narrowing the lawsuit by dismissing some other claims.

The case reflects broader concerns in the entertainment industry, where creatives are urging the government to uphold copyright laws amid the rise of unregulated AI.