Tuesday Sep 22
GOVERNANCEMicrosoft

Microsoft Exec Called AI Scraping Theft

22SEP
93% FEWER CLICKSTHE MEMOCOPILOT

Unsealed filings in the Times lawsuit show what Microsoft and OpenAI said in private. One Microsoft director called training on news the largest theft of labor in history. Nadella said paywalled content should be licensed.

Brent Hecht, Microsoft's director of Applied Science, wrote the theft line in a January 2023 memo. A 2024 Microsoft deck showed Copilot cutting Times click-through by up to 93 percent and called it a doom loop.

Nick Turley, who runs ChatGPT, said publishers face an existential threat and that the products are largely substitutive. Greg Brockman replied ah nice to a colleague's Times paywall hack.

The data: 91,692 Times and Daily News works in training, over two million Times documents via Common Crawl, copyright notices stripped. OpenAI has not commented.

full brief & sources

⚡ Why this matters

  • Fair use cases turn on market harm. Microsoft's own deck quantified the harm at 93 percent.
  • The Trump administration filed a brief supporting fair use on September 2. These memos are the plaintiffs' answer.
  • Every AI company has internal emails like these. Discovery is now the real risk in every copyright suit.

🔍 What happened

  • TechCrunch's Rebecca Bellan and the Washington Post reported the unredacted filings on September 17. The quotes come from the New York Times' brief; the underlying exhibits remain sealed.
  • Brent Hecht, Microsoft director of Applied Science, in a January 2023 memo: training on news content is "an astonishing theft of unprecedented proportions" and "the largest theft of labor in human history."
  • A January 2024 Microsoft deck found Copilot's answer engine cut Times click-through by up to 93 percent versus Bing and called it a "doom loop" where the product threatens its own suppliers.
  • Satya Nadella testified that paywalled content "should be licensed," which would have required OpenAI to retrain.
  • Nick Turley, head of ChatGPT, said publishers face an "existential threat" and the products are "largely substitutive." Greg Brockman said models are "excellent at news."
  • The Times says 91,692 of its works and the Daily News' appeared in mid-training data, plus over 2 million nytimes.com documents via Common Crawl. Project Taxi and Mango added 160,903 works with copyright notices stripped.

💬 Smart takes

  • Steven Lieberman, Daily News counsel: "they knew that what they were doing was wrong."
  • Brent Hecht's memo, per the filing: it is "highly unusual that an end-product threatens the economic foundations of its essential suppliers."
  • Skeptic: we are reading the plaintiffs' selection of quotes from sealed exhibits. Context could soften the memos, and internal dissent is not a legal admission.

🧭 Where this goes

  1. LikelyMicrosoft and OpenAI settle with the Times and Daily News before a jury sees these slides.
  2. Likelyother publishers in pending suits file to unseal similar internal documents within months.
  3. Possiblethe court admits the 93 percent click-through deck as evidence of market harm, weakening the fair use defense across cases.
  4. Wild CardCongress uses the memos to fast-track a compulsory licensing scheme for news content.

🥄 The Spoon Take

Forget the legal theory. Read the deck. Microsoft measured that its own product cut Times traffic by 93 percent and called it a doom loop, then shipped it. Fair use is decided on harm to the market. The defendants just documented the harm themselves. Every AI lab's discovery folder looks like this.

🤔 Pushback

These are cherry-picked lines from sealed exhibits, and a court can find internal worry without finding infringement.

·TechCrunch - Unredacted filings revealed·MLex - NYT v OpenAI filings·Washington Post - Court records show