Elon Musk's xAI, Meta And Google Sued By New York Times Reporter John Carreyrou Over Alleged Use Of Pirated Books To Train AI

On Monday, New York Times investigative reporter and author John Carreyrou filed a federal lawsuit accusing major AI companies of illegally using copyrighted books to train their chatbots without permission.

Authors Accuse AI Giants Of Copyright Theft

Carreyrou, best known for authoring "Bad Blood: Secrets and Lies in a Silicon Valley Startup," sued ChatGPT-maker OpenAI, Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google, Meta Platforms, Inc. (NASDAQ:META), Elon Musk's xAI, Anthropic and AI search startup Perplexity in California federal court.Bad Blood is an account about the fraud at Theranos, the startup led by Elizabeth Holmes.

Five other writers — Lisa Barretta, Philip Shishkin, Jane Adams, Mathew Sacks and Michael Kochin —joined the complaint, alleging the companies copied their books without consent to train large language models that power generative AI tools.

See Also: Sam Altman Calls Google ‘A Huge Threat’, Says The Tech Giant Would Have Been Able To ‘Smash’ OpenAI In 2023

No Class Action As Authors Seek Individual Claims

Unlike several pending AI copyright lawsuits, the plaintiffs are not pursuing a class action. The complaint argues that class-action settlements allow AI companies to resolve thousands of alleged infringements at steep discounts.

"Plaintiffs desire to retain full control of their case and avoid having their rights diluted by being swept into sprawling class-action settlements structured to resolve claims for pennies on the dollar," the filing read.

Anthropic Settlement Draws Fresh Criticism

The new lawsuit mentions Anthropic's August settlement. At the time, the AI startup agreed to pay $1.5 billion to settle a class-action lawsuit filed by authors accusing it of using their books without authorization to train Claude.

According to the new complaint, authors in that case stand to receive only a small portion of the maximum statutory damages allowed under U.S. copyright law.

"The danger is not hypothetical," the filing read, adding, "These pending class actions and proposed settlement(s) seem to serve Defendants, not creators."

OpenAI, Anthropic, Perplexity And xAI See Billion-Dollar Valuations

OpenAI is reportedly negotiating a funding round that could raise up to $100 billion and potentially value the ChatGPT creator at as much as $830 billion, according to The Wall Street Journal.

Earlier, The Information reported the same deal but estimated OpenAI's valuation at around $750 billion. In October, the company was valued at roughly $500 billion in a secondary market transaction.

Meanwhile, Anthropic, the AI startup behind the Claude LLM, is reportedly planning an IPO as early as 2026 and exploring a funding round that could push its valuation above $300 billion.

In September, Perplexity, an AI-driven search startup that competes with Google by delivering conversational answers to queries, raised $200 million at a $20 billion valuation.

Separately, reports last month indicated that Musk's xAI is in advanced talks to raise $15 billion, potentially valuing the company at $230 billion.

Alphabet currently has a market capitalization of $3.7 trillion, while Meta has a market cap of $1.6 trillion.

Benzinga Edge Rankings rank Google in the 90th percentile for momentum, with other metrics showing how its performance stacks up against peers such as Meta and Apple.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.