AI startup reportedly "did not bother to respond" to notice of infringement.

Rupert Murdoch's Dow Jones and the New York Post have accused artificial intelligence start-up Perplexity of a "brazen scheme" to rip off their journalism for its AI-driven search engine in a lawsuit filed in New York on Monday.

The publishers, both subsidiaries of News Corp, alleged the AI start-up, which is seeking to raise up to $1 billion in a funding round that will value it at $8 billion, was "engaging in a massive amount of illegal copying" of their work.

The lawsuit said Perplexity is "diverting customers and critical revenues" away from the news publishers, whose titles include the Wall Street Journal, "freeriding on the valuable content the publishers produce."

Perplexity's search engine allows users to get instant answers to questions, with sources and citations, using large language models (LLMs) from platforms such as OpenAI and Anthropic.

However, its "answer engine" copies on a "massive scale . . . copyrighted news content, analysis, and opinion as inputs into its internal database," the lawsuit said. These then generate responses to users' queries "that are intended to and do act as a substitute for news and other information websites," according to the lawsuit, whose claims include copyright infringement.

The lawsuit is the latest clash between publishers and AI companies, which are keen to use content to train their models and provide up-to-date responses to users.

Some, such as OpenAI, have signed commercial partnerships and licensing agreements with publishers, including News Corp and the Financial Times, which are among the newspapers that allow ChatGPT users to see select attributed summaries, quotes and links.