US Justice Department sides with OpenAI, Microsoft in NYT copyright suit, calling AI training 'fair use'

The US Justice Department has sided with OpenAI and Microsoft in a copyright infringement lawsuit brought by The New York Times, arguing that using news articles to train AI systems constitutes "fair use" under copyright law.

According to The New York Times, the Justice Department filed a brief Wednesday with the US District Court for the Southern District of New York urging the court not to accept the Times' argument that using its content to train large language models violated copyright law.

The Justice Department is not a direct party to the lawsuit. Under US legal procedure, however, the government may submit a so-called amicus curiae brief in cases involving issues of public interest to make its position known.

The New York Times filed a lawsuit in 2023 alleging that OpenAI and Microsoft used millions of its articles without permission to train AI models including ChatGPT and Copilot. The Times is seeking damages and an injunction to stop the unauthorized use of its content for AI training.

The Justice Department argued, however, that the use of copyrighted works during AI model training constitutes "fair use" because the material is used in a "transformative" way — for a new purpose distinct from the original.

Fair use is a copyright doctrine that permits the use of copyrighted material without the rights holder's permission, based on a comprehensive assessment of factors including the purpose and character of the use, the amount of the work used, and the effect on the market value of the original.

The Justice Department framed the advancement of the AI industry as a matter directly tied to US national security.

Deputy Attorney General Stanley Woodward said on social media that the administration "will never allow America to be placed at a disadvantage relative to foreign adversaries because of a clearly incorrect interpretation of copyright law."

The Justice Department also expressed opposition to any requirement that AI companies pay licensing fees for news content.

It argued that steep licensing costs could restrict competition in the LLM market and block smaller AI companies with limited resources from entering it.

Mandatory content licensing fees could allow large technology companies — those capable of absorbing the costs — to dominate the LLM market, the Justice Department said.

It also said such a regime could deliver outsized financial benefits to established major news organizations.

The New York Times pushed back immediately. Times spokesperson Graham Janes said the government "is taking the side of a handful of AI companies worth trillions of dollars at the expense of the many American creators whose work has been taken from them."

Janes added, "AI and creators can both thrive. AI companies just need to pay a fair price for the content that makes their products possible."

This is the second time of late that the Justice Department has directly weighed in on a major lawsuit involving AI companies.

In June, the Justice Department asked a Mississippi court to dismiss a lawsuit filed by the NAACP and environmental groups over the construction of a data center by Elon Musk's AI company xAI, making the same argument that the advancement of the US AI industry is directly linked to national security.