Perplexity is a company that positions itself as an AI-powered alternative to Google. Unlike traditional search engines, Perplexity allows users to “ask any question” and, by scouring the internet, provides clear, conversational answers that are verifiable.
In other words, its product that operates as an AI-enhanced search engine, offers what it calls an 'answer engine,' in which since its launch in 2022, has seen a notable success.
However, Perplexity faces a serious legal challenge, due to its aggressiveness in allegedly using others' online content for its AI training materials.
And here, News Corporation-owned Dow Jones & Co. (publisher of the Wall Street Journal) and the New York Post, filed a federal lawsuit against Perplexity, alleging it engaged in a "massive amount of illegal copying of publishers’ copyrighted works and diverting customers and critical revenues away from those copyright holders."
According to the suit, Perplexity is alleged to have lifted news, opinion pieces, and analyses directly from News Corporation publications.
Perplexity fires back, with its founder and CEO saying that the company has done nothing wrong.
In an interview at Wall Street Journal's Tech Live conference, Aravind Srinivas said that:
"Nobody's coming to Perplexity to ingest their news. People are directly going to [The] New York Times, The Wall Street Journal. People come to Perplexity for understanding the news in the context of what they already know. 'How does this news affect me?'"
"We are not interested in taking the exact content and resurfacing it. We are not trying to be the news alternative."
"So, we are going to try our best to engage and communicate what the goals of our product are and how they can be symbiotic with the existing news outlets."
Srinivas explained that Perplexity's goal is to help others digest the news.
Instead of 'scraping' others' data for training its Large Language Models, Srinivas suggests that it rather 'scours' the internet to create an index of web pages for its models to reference.
In a blog post on its website, Perplexity explains that:
"That is not our view of the world."
"We believe that tools like Perplexity provide a fundamentally transformative way for people to learn facts about the world. Perplexity not only does so in a way that the law has always recognized but is essential for the sound functioning of a cultural ecosystem in which people can efficiently and effectively obtain and engage with knowledge created by others."
[...]
"The lawsuit reflects an adversarial posture between media and tech that is—while depressingly familiar—fundamentally shortsighted, unnecessary, and self-defeating. We should all be working together to offer people amazing new tools and build genuinely pie-expanding businesses."
"There are countless things we would love to do beyond what the default application of law allows, which entail mutually beneficial commercial relationships with counterparties like the companies here who chose to sue rather than cooperate. Perplexity is proud to have launched a first-of-its-kind revenue-sharing program with leading publishers like TIME, Fortune, and Der Spiegel, which have already signed on."
"And our door is always open if and when the Post and the Journal decide to work with us in good faith, just as numerous others already have."
The entrepreneur also stayed cool when he was riddled by questions from reporter Deepa Seetharaman, including questions about Perplexity's cash flow and claims by news outlets that it doesn't make citations clear.
"Even yesterday, Anthropic released another version of their models, Claude 3.5. It's getting better and better every few months. So whatever issues exist today are a new set of issues that did not exist one or two years ago."
Srinivas acknowledged the tech is "not perfect."
But that tech, is the current future.
Perplexity argues that media companies like News Corporation sue generative AI companies because they're stuck in the past - and they risk getting left behind because "AI-enhanced search engines are not going away.”
In another interview, Srinivas once said that he's a "newbie CEO" who is just "trying to learn."
"I underestimated how important people take us, to be honest. I was still thinking we are a product that most people don't even know or care about. So all that attention was very new to me."
This isn’t the first time the startup has faced scrutiny over its practices, and it may not be the last.
Read: To Compete Against Google Is To 'Do Something Google Don't Want To Do'