Business
Column: Who's really winning in Sarah Silverman's copyright suit against OpenAI?
If you’ve been following the war between authors and the purveyors of AI chatbots over whether the latter are infringing the copyrights of the former, you might have concluded that comedian and author Sarah Silverman and several fellow authors suffered a crushing blow in their lawsuit against OpenAI, the leading bot maker.
In his ruling Feb. 12, federal Judge Areceli Martínez-Olguín of San Francisco indeed tossed most of the copyright claims Silverman et. al had brought against OpenAI in lawsuits filed last year.
That’s the way much of the press portrayed the outcome: “Judge dismisses most of Sarah Silverman’s copyright infringement lawsuit” (VentureBeat). And “OpenAI Scores Court Victory” (Forbes). And “Sarah Silverman, Authors See Most Claims Against OpenAI Dismissed by Judge” (Hollywood Reporter).
If someone tells you it’s not about the money but the principle, they’re really talking about the money.
— Robin Feldman, UC College of the Law
Well, not really. Of the six counts in the authors’ lawsuit, one — whether OpenAI directly copied or distributed the plaintiffs’ works — wasn’t even before the judge because OpenAI hadn’t asked him to dismiss it. It’s a key allegation, and it’s still alive.
Of the other five, the judge cleared one to proceed; that’s a claim that OpenAI engaged in an “unfair” business practice under California law. He dismissed four others but gave the plaintiffs permission to amend their complaint and try again. The amended complaint is due before him by March 13.
At best, this is a mixed victory for both sides. But this lawsuit and a couple of other similar cases provide a road map for how the copyright issue may play out, in and out of court: with settlements that outline how much the artificial intelligence industry should pay copyright holders for using their works, and how those payments should be made.
Any such settlements would have to recognize that AI chatbots are here to stay, but also that they can’t mine published material for free.
“It’s hard to imagine that you could put the genie back in the bottle — that courts would decide that generative AI may not be used under any circumstances at any time,” says Robin Feldman, an expert in intellectual property law at UC College of the Law. “At the same time, it’s hard to imagine that generative AI could end up free to do whatever it wants at any time with copyrighted material.”
It’s fair to imagine, as well, that the issue is going to pose a headache for judges right up to the point that it lands before the Supreme Court, as Feldman believes is likely. That’s because of two aspects that are anything but cut-and-dried: copyright law and a new technology. U.S. copyright law is extremely complicated, and the technology bears features that don’t resemble anything seen in earlier technology transitions. Put them together, and the complexities are magnified exponentially.
Before going further, let’s define the landscape.
OpenAI is a high-tech firm with an investment from Microsoft that has been reported to be as much as $13 billion. Its best-known product is ChatGPT, a chatbot that spits out human-sounding answers to questions posed in plain language, though sometimes the “humans” it strives to emulate come off like idiots or plagiarists.
As I’ve reported, the chatbot business, like artificial intelligence research throughout its history, has been infected with hype. But it’s currently the target of a high-tech gold rush based on expectations that it will dramatically remake industries such as manufacturing, medicine, law — almost anything you can name. We’ll see.
As I’ve also reported, it’s a misnomer to call chatbots “artificial intelligence.” They’re not intelligent by any common definition of the word; they’re just good at seeming intelligent to an outsider unaware of the electronic processing inside them — a simulacrum of human thought, not the product of cogitation.
Chatbots don’t create content, as such. They have to be “trained” by pumping their databases full of human-produced content — books, newspaper articles, junk scraped from the web, etc. All this material allows the bots to generate superficially coherent answers to questions by generating prose patterns and sometimes repeating facts they dredge up from their databases.
That brings us back to the copyright issue. Silverman and other plaintiffs, including the writers Michael Chabon and Ta-Nehesi Coates, who filed a complaint similar to hers last year, contend that in using their works to train its chatbots, OpenAI is copying their works without permission, compensation or credit. Having “ingested” their works, the bots are “able to emit convincingly naturalistic text outputs.”
Indeed, Silverman’s lawsuit states that when asked to do so, ChatGPT is able to generate accurate summaries of the copyrighted works — “something only possible if ChatGPT was trained” on those works.
Among OpenAI’s defenses is that its use of copyrighted material falls within the exemption known as “fair use.” That’s a concept that allows snippets of published works to be quoted in reviews, summaries, news reports, research papers and the like, or to be parodied or repurposed in a “transformative” way.
OpenAI argues that previous court rulings say that creating copies of a copyrighted work as a preliminary step in developing a new, non-infringing product falls safely under the fair use protection, and that’s all it’s doing.
But it’s not at all clear that OpenAI’s interpretation will stand. In copyright law, fair use is a moving target, interpreted by judges on a case-by-case basis. “There are no hard-and-fast rules, only general guidelines and varied court decisions,” according to a digest by Stanford University librarians.
As chatbot developers snarf up more content to “train” their products, the potential copyright claims are only going to multiply. A disclosure: At least three of my books are in a database used to train some chatbots. I’m not a plaintiff in any of these lawsuits, but since they’re all fashioned as class actions in which I might qualify as a class member, it’s conceivable that if any go to trial and end with a class settlement, I might get a (probably vanishingly tiny) payout.
The lawsuits by individual writers are only one category. As I reported earlier, Getty Images has sued an AI company for copying millions of historical and contemporary photographs to which it holds licensing rights, allegedly to build a competing business. Dozens of music publishers have sued another AI firm for its “mass copying and ingesting” of copyrighted song lyrics to enable its bot to regurgitate them to its users by generating “identical or nearly identical copies of those lyrics” on request.
A lawsuit brought by New York Times Co. against Microsoft and OpenAI has attracted heavy attention not only because of the prominence of the plaintiff but because the newspaper produced evidence that OpenAI’s chatbot actually spits out lengthy verbatim passages from Times articles. This allows the Times to assert that the chatbot is cutting into the market for its work, a factor that judges have sometimes considered to reject a fair-use defense.
That’s a claim that the Silverman and Chabon lawsuits weren’t able to back up with evidence, which is what prompted Judge Martínez-Olguín to put some of their copyright claims on hold. He invited the plaintiffs to come back with allegations “that any particular output is substantially similar — or similar at all — to their books,” at which point he might reconsider.
Feldman observes that this entire legal issue is in the early “posturing” stage. The AI industry bases its defense on the principle that it’s doing nothing wrong and doesn’t owe creators anything. The creators say the principle is that what the chatbot developers are up to produces “an irreparable injury that cannot fully be compensated or measured in money,” to quote the Silverman lawsuit.
But money has settled previous donnybrooks over new technologies. Most notably, the recording industry and broadcasters solved their dispute over radio and television broadcasting of music with a licensing arrangement initially reached more than 80 years ago and that has survived in its essence to cover not only radio and television stations but also “streaming services, concert venues, bars, restaurants, and retail establishments.” (That’s not to say that artists are necessarily fairly compensated for these uses.)
That’s the best bet for how the chatbot issue will unfold, in time: with a financial arrangement sufficiently fair to both sides to be blessed by a judge. Feldman advises not to buy into the assertions on both sides that with principles at stake, no financial arrangement is possible. The New York Times, indeed, says that it filed its lawsuit only after negotiations to place a financial value on the use of its content failed to produce a “resolution.”
Feldman cites an adage (often attributed to the turn-of-the-century humorist Kin Hubbard) that holds: “If someone tells you it’s not about the money but the principle, they’re really talking about the money.”
Dear Mr. Pelley:
I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.
Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.
Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.
Sincerely,
Nick Bilton
Executive Producer, 60 Minutes
The co-founder of Aspiration, Joseph Sanberg, was sentenced to 14 years in prison on Monday after defrauding investors and lenders of over $248 million.
The startup, an eco-friendly digital banking company boasting fossil fuel-free investments, carbon offsets for gas purchases, and a debit card with cash-back benefits for shopping at clean companies, was founded by Sanberg and Andrei Cherny. Cherny left the company in 2022 and has not been charged.
Sanberg, an Orange County native, pleaded guilty to wire fraud in October after being arrested in March last year. Aspiration subsequently filed for bankruptcy and liquidated all of its assets by July.
Sanberg and venture capitalist Ibrahim AlHusseini, who also faces charges, together forged a series of bank statements in order to obtain loans. From 2020 to 2021, the pair forged AlHusseini’s bank statements to show millions of dollars in assets in order to obtain millions of dollars from lenders.
Additionally, they forged a letter from their audit committee stating that $250 million in funds were available, when in reality Aspiration had less than $1 million. The amount of loans defrauded exceeded $248 million.
In 2021, Sanberg artificially inflated Aspiration’s 2021 revenue by $44 million by recruiting 27 fake customers to sign letters of intent pledging tens of thousands of dollars per month for tree planting services. Sanberg himself funded the contracts and used the inflated revenue numbers to obtain more loans.
The charges sparked an NBA investigation into salary cap allegations due to Aspiration’s connections with Clippers owner Steve Ballmer.
Ballmer personally invested $60 million in Aspiration, all of which was lost. He is now the target of a civil lawsuit alleging his participation in the scheme. Ballmer denies the allegations.
The team announced a $300-million sponsorship deal with Aspiration, and Clippers player Kawhi Leonard signed a four-year, $28-million marketing contract with the company, which reportedly performed no duties. The issue has raised concerns about how players are circumventing the NBA’s salary cap.
The team lost the $300-million sponsorship deal and an additional $20 million paid for carbon offset purchases.
Residents in the city of Monterey Park will be the first in the nation to vote on a permanent ban on data centers Tuesday.
If approved, Measure NDC would prohibit data centers within the city limits and could only be overturned by another vote.
Yard signs saying “No Data Center” in English and Chinese with images of dragons line sidewalks in the San Gabriel Valley city.
As a wave of data center opposition sweeps the country, numerous towns and counties across the U.S. have instituted temporary moratoria and other restrictions on the facilities. But only a handful have instituted indefinite bans, and just four other towns have sent related matters to the ballot.
Supporters are hoping the vote will set a precedent for the rest of the region, where residents are fighting proposals in Vernon and City of Industry.
“This is about as permanent a ban as we can get,” said Steven Kung, co-founder of the group No Data Center Monterey Park. “Winning Measure NDC would send a huge message to the rest of the San Gabriel Valley about how residents don’t want data centers.”
The ballot measure emerged from the fight against a 247,000-square-foot center proposed in 2024 by the Australian-owned investment firm HMC StratCap for a residential area in Monterey Park.
The facility would have sat less than 500 feet away from the nearest home and used three times the electricity of the 60,000-person, predominantly Asian American city.
While the developer touted the potential for jobs and tax revenue, residents expressed concerns about noise and air pollution, rising electricity rates and a potential to lower property values.
The company pulled its plans in late March following public outcry and a March 4 city council vote to extend a temporary data center moratorium and place a ban on Tuesday’s ballot.
In a letter to the city council, HMC StratCap said it would pursue a different use for the land and would not engage in a ballot measure fight.
The city council later banned data centers indefinitely, the first in California to do so, said Mayor Elizabeth Yang. But she’s still been out campaigning for the measure with all four other council members.
“If a council puts in an ordinance, a future council can reverse it too,” said Yang. “With the ballot measure, unbanning it is a lot harder because you need the entire city to vote on it.”
The measure proposes the ban “to protect air quality, drinking water resources, and public health” and “prevent impacts to electricity and water rates.”
While California places third in the country for existing data centers with about 300 facilities, it hasn’t been a hot spot in the recent AI-driven data center boom. High electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in Virginia, Texas, Georgia, Illinois or Arizona.
“Most of California’s data centers are small by today’s standards,” said Shaolei Ren, an engineering professor at UC Riverside who studies how to reduce the environmental impacts of data centers. “Ten years ago, they would be medium-sized, but the power demand for new AI data centers has increased a lot.”
The average operating data center demands 45 megawatts, according to the Washington Post, while the average planned one would draw 430 MW. The one proposed for Monterey Park would have required about 50 MW at peak demand.
As proposals crop up in SoCal, they’re met with fierce opposition. Montebello, El Monte and Baldwin Park have all enacted temporary moratoria, and Alhambra recently banned data centers as part of a zoning code update. City of Industry, Vernon, City of Commerce and Santa Fe Springs are moving in the other direction, trying to court developers and streamline data center approvals. Community groups are fighting that.
Outside the San Gabriel Valley, residents of Coachella and Imperial County are showing up in droves to protest local proposals.
Matthew Shaw, a volunteer with the Coalition for Responsible Data Center Development, who recently published a report on opposition to AI data centers, said a vote to ban them in Monterey Park “would lead to copycats, partially because so many groups are just opposed to any data center development at all.”
While there is no formal opposition to Measure NDC, some building trades like Ironworker Local 433 supported the Monterey Park data center when it was still live before city council. Those in the data center industry are lamenting the state of public opinion.
“These are multi-billion-dollar assets that are built by multi-trillion-dollar companies. These things will get done,” said Mehdi Paryavi, chairman of the International Data Center Authority. “My biggest problem is that our industry does not invest enough in community engagement.”
Paryavi said towns that seek to limit data centers are missing out on thousands of jobs generated by data center construction, operations and customers, as well as faster artificial intelligence speeds and better performance.
Kung said local community organizers are “looking at the empirical evidence” and seeing a ban as a win.
“We’ve never seen a city that embraces a data center and is like, ‘Look how our quality of life has increased, look how all the revenue has gone into citywide improvements,’” he said. “That just doesn’t exist.”
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