The news: The New York Times filed a lawsuit against AI startup Perplexity on Friday, adding to the more than 40 current court cases between AI companies and copyright holders. The Times claims that Perplexity repeatedly violated its copyrights despite several requests that the AI company stop using its content without an official agreement.

The trend: The lawsuit is the second of The Times’ cases against AI companies—and another in a long list of similar incidents.

• The Times filed a lawsuit against OpenAI and Microsoft in 2023, claiming that the companies used The Times articles to train their AI systems without permission or compensation. OpenAI and Microsoft disputed the claims.
• Perplexity faced another lawsuit in August 2024 from The Wall Street Journal owner Dow Jones, The New York Post, and more publications for similar violation claims. Reddit has also sued Perplexity and data-scraping companies over claims that they improperly collected and purchased the platform's user-generated content.
• Rolling Stone parent company Penske Media in September became the first major publisher to sue Google over claims that its AI Overviews feature uses journalism without permission to train and display AI summaries, significantly reducing publisher referral traffic.

Why it matters: Mounting lawsuits represent fundamental questions about copyright, compensation, and where the relationship between publishers and AI companies is headed.

• Lawsuits like The Times’ highlights the creative industry’s fight against protecting their IP from unauthorized use amid the rapid proliferation of AI. Publishers face a landscape where copyrighted material is often used without permission and where they have little say over how content is repurposed.
• Publisher revenues could be under threat. AI-generated summaries and search reduce referral traffic to publisher sites, meaning publishers must quickly shift strategies to lessen the impact of AI on affiliate and advertising revenues.
• The balance of power is shifting. If courts side with publishers, AI firms could have to start paying for content licensing, setting legal precedents for how AI companies access and utilize online content. But if the lawsuits don’t lead to any meaningful changes, AI could continue to reshape the digital ecosystem, eroding publisher leverage and altering traditional revenue streams.

What it means for advertisers: Lawsuits like The Times’ underscore how AI is impacting the overall health and future of the digital advertising ecosystem—requiring advertisers to rethink traditional strategies.

• Less traffic to publisher sites means fewer opportunities for advertisers hosting content on those sites to reach audiences through traditional channels. This translates to reduced ad impressions and engagement, lower clickthrough rates, and the need to devise strategies that are optimized for AI visibility.
• Advertisers must continue shifting away from traditional digital marketing methods toward ones that are capable of offsetting AI’s impact on organic traffic. Methods like increasing community and social media presence, developing authoritative content that will appear in AI citations, and investing in digital PR and paid ads will become increasingly valuable.