Reddit Files Copyright Lawsuit Against Perplexity AI Over Data Scraping Allegations

Legal Battle Over AI Training Data Intensifies

Social media giant Reddit has filed a federal lawsuit against artificial intelligence company Perplexity, alleging systematic copyright infringement through unauthorized data scraping of user posts, according to court documents filed in New York. The legal action marks an escalation in the ongoing conflict between content platforms and AI developers over the use of copyrighted material for training machine learning models.

Legal Battle Over AI Training Data Intensifies
Multiple Defendants Named in Complaint
Conflicting Narratives Emerge
Reddit’s Stance on Data Protection
Financial Stakes in AI Data Licensing
Broader Industry Implications

Multiple Defendants Named in Complaint

The lawsuit, filed Wednesday, reportedly names three additional defendants that Reddit claims assisted Perplexity in collecting its data: Lithuanian data scraping service Oxylabs, entity AWMProxy described in the complaint as a “former Russian botnet,” and Texas-based startup SerpApi. Sources indicate that Reddit alleges these organizations helped extract copyrighted content “by masking their identities, hiding their locations and disguising their web scrapers as regular people.”

Conflicting Narratives Emerge

Perplexity, which operates an AI-powered search engine, has strongly denied the allegations and accused Reddit of what it characterizes as “extortion” and opposition to an open internet. In a statement posted on Reddit’s own platform, the AI company argued that it does not train its models on Reddit content but merely summarizes and cites public discussions, making licensing agreements “impossible” in its view.

Analysts suggest this case represents one of numerous legal challenges filed by content owners against AI companies accused of using copyrighted material without permission to train their large language models. Reddit has been particularly active in this legal arena, having launched a similar ongoing lawsuit against AI startup Anthropic in June.

Reddit’s Stance on Data Protection

In a statement shared with media outlets, Reddit Chief Legal Officer Ben Lee claimed that AI companies are “locked in an arms race for quality human content” and that this competitive pressure has fueled what he described as an “industrial-scale ‘data laundering’ economy.” The report states that scrapers allegedly bypass technological protections to steal data, then sell it to clients seeking training material.

Reddit, which hosts over 100,000 interest-based “subreddit” communities, asserted in its lawsuit that its user posts had become the most commonly cited source for AI-generated answers on Perplexity’s platform. The social media company further claimed that after sending Perplexity a cease-and-desist letter, the AI company “increased the volume of citations to Reddit forty-fold.”

Financial Stakes in AI Data Licensing

According to industry reports, Reddit has been actively working to monetize its massive data pool through AI-related licensing agreements. The company has reportedly signed such agreements with AI industry leaders OpenAI and Alphabet’s Google. In February, Reddit’s COO Jen Wong told trade publication Adweek that these AI licensing deals accounted for nearly 10% of Reddit’s revenue.

Perplexity responded to this business model by stating, “Perplexity believes this is a sad example of what happens when public data becomes a big part of a public company‘s business model,” suggesting that data licensing has become an increasingly important revenue source for Reddit since its initial public offering.

Broader Industry Implications

This legal confrontation occurs amid growing tensions between social media platforms and the AI industry over data rights and compensation. AI researchers have previously noted that Reddit’s extensive collection of moderated conversations can help make AI chatbots produce more natural-sounding responses, making it particularly valuable training material.

The outcome of this lawsuit could establish important precedents for how content platforms can protect and monetize user-generated data in the age of artificial intelligence, while potentially affecting how startup companies in the AI sector access training materials for their developing models.

References

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Major AI Infrastructure Expansion Across Australia

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