Unredacted filings in The New York Times copyright suit reveal private admissions about scraping and paywall bypass.

New unredacted material in The New York Times copyright lawsuit against OpenAI and Microsoft shows private admissions about AI training data. A Microsoft executive described AI scraping as the largest labor theft in history, and OpenAI leaders called their models a threat to the survival of publishers and journalists.

The filing also details allegations that the companies bypassed paywalls undetected, built training datasets through mass scraping, and stripped copyright notices from training data. The Times first sued OpenAI and Microsoft three years ago over copyright infringement. Much of the new information comes from The Times’ own brief, while underlying exhibits remain sealed.

For builders, the admissions matter because fair use turns partly on whether a model substitutes for the original work and harms its market. Microsoft data shows Copilot caused click-through rates for The Times’ domain to fall as much as 93% versus Bing search. An internal Microsoft presentation described the decline as a loop that would hurt model performance and the open web.

Microsoft CEO Satya Nadella testified that companies should license paywalled content before using it for training and grounding, and he said he would have required OpenAI to retrain if he knew about paywall scraping. The Trump administration filed a brief this month defending OpenAI’s unlicensed training. Judges have mostly favored AI companies on fair use, while the market-harm evidence now tests that defense.

What matters

• Unsealed filings say Microsoft and OpenAI leaders privately described AI training data practices as theft.
• The admissions undercut fair use because Microsoft data links Copilot answers to a 93% drop in Times clicks.
• Watch whether courts treat market harm from answer engines as decisive in the fair use fight.

Why it matters

Watch whether courts treat market harm from answer engines as decisive in the fair use fight.

This GenAI News article was prepared in original wording using reporting and materials published by TechCrunch AI. Source reference: https://techcrunch.com/2026/09/17/microsoft-exec-called-ai-scraping-the-largest-theft-of-labor-in-human-history-new-unredacted-filings-reveal/.

Drafted by the GenAI News review pipeline.