Small Newspapers Sue OpenAI and Microsoft Over AI Training

A coalition of 35 publishers operating roughly 400 community newspapers filed a copyright infringement lawsuit against OpenAI and Microsoft on June 24, alleging the tech giants scraped their content without authorization to train ChatGPT and Microsoft Copilot.

The suit joins several related cases before the same federal judge in New York, including The New York Times' ongoing litigation against the same defendants. According to reporting by The Seattle Times, the complaint argues these AI systems generated hundreds of billions in market value while publishers received "not a cent" for work that made the products possible.

The fair use question

A central legal issue is whether using copyrighted news content for AI training constitutes "fair use" under copyright law. The plaintiffs contend their journalism involves far more than repeating shared facts—it requires researching, conceiving, reporting, editing and presenting stories with unique voice and angles that merit copyright protection.

Matthew Platkin, former New Jersey attorney general representing the small papers, emphasized these are largely family-owned operations, not hedge-fund-backed chains. "These are largely mom-and-pop operations that do the hard work of showing up at community events, sports events and town council meetings and other things that really affect people's lives," he told The Seattle Times.

The lawsuit notes that while OpenAI began paying licensing fees to some large newspapers and wire services, small papers were excluded despite often providing their communities' only local reporting.

Why it matters

The outcome could establish a compensation framework for the roughly 5,400 small newspapers producing most of America's local journalism. These outlets have already weathered massive disruption from search engines and social media platforms that aggregated their content without meaningful payment. If courts rule AI training requires licensing, it could provide a revenue stream these publishers need to survive—and potentially reverse trends toward civic illiteracy and political polarization linked to local news decline.

Publishers seek fair compensation

Zack Richner of Richner Communications, the lead plaintiff, said publishers aren't opposed to AI innovation and believe such tools may help journalists. "The rub is that those tools were built on the backs of our workers … and built up these trillion-dollar companies and we don't see any of the fruits of that labor," he said.

Jeremy Gulban, a New Jersey tech entrepreneur who began acquiring newspapers in 2020, said publishers learned from past mistakes. "I hear a lot of people say we can't repeat the mistakes of the past, where we gave away the content and hoped for the best," he explained. "This time, I think there's a feeling we have to be more in control of our own destiny here."

Microsoft provided a statement saying the claims "lack merit" and that "lawfully developed AI-powered tools should be allowed to advance responsibly." OpenAI did not respond to requests for comment.

The New York Times has spent more than $28 million on its copyright lawsuit against OpenAI and Microsoft since 2023. Dailies owned by Alden Global Capital filed similar litigation in 2024.

These details were first reported by Brier Dudley at The Seattle Times.