Business
Get paid or sue? How the news business is combating the threat of AI
Journalist Javier Cabral wanted to test Google’s much-hyped, experimental artificial intelligence-powered search results. So he typed out a question about a topic he knew intimately: the Long Beach bakery Gusto Bread’s coffee.
In less than a second, Google’s AI summarized information about the bakery in a few sentences and bullet points. But according to Cabral, the summary wasn’t original — it appeared to be lifted from an article he wrote last year for the local food, community and culture publication L.A. Taco, where he serves as the editor in chief. For a previous story, he’d spent at least five days working on a feature about the bakery, arriving at 4 a.m. to report on the bread making process.
As Cabral saw it, the search giant’s AI was ripping him off.
“The average consumer that just wants to go check it out, they’re probably not going to read [the article] anymore” Cabral said in an interview. “When you break it down like that, it’s a little enraging for sure.”
The rise of AI is just the latest existential threat to news organizations such as Cabral’s, which are fighting to survive amid a rapidly changing media and information environment.
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1. L.A. Taco editor Javier Cabral in the alleyway behind the Figueroa Theatre in Los Angeles in 2020. (Mariah Tauger / Los Angeles Times) 2. The L.A. Taco office in Los Angeles on June 26. (Zoe Cranfill / Los Angeles Times)
News outlets have struggled to attract subscribers and advertising dollars in the internet age. And social media platforms such as Facebook, which publishers depended on to get their content to a massive audience, have largely pivoted away from news. Now, with the growth of AI thanks to companies including Google, Microsoft and ChatGPT maker OpenAI, publishers fear catastrophic consequences will result from digital programs automatically scraping information from their archives and delivering it to audiences for free.
“There’s something that’s very fundamentally unfair about this,” said Danielle Coffey, president and chief executive of the News/Media Alliance, which represents publications including the New York Times and the Los Angeles Times. “What will happen is there won’t be a business model for us in a scenario where they use our own work to compete with us, and that’s something we’re very worried about.”
Tech companies leading the charge on AI say their tools are not engaged in copyright infringement and can drive traffic to publishers.
Google said in a statement that it designed its AI Overviews — the summaries that appear when people enter search queries — to “provide a snapshot of relevant information from multiple web pages.” The companies also provide links with the summaries so people can learn more.
AI and machine learning could provide useful tools for publishers when doing research or creating reader recommendations. But for many journalistic outlets, the AI revolution represents yet another consequence of the tech behemoths becoming the middlemen between the content producers and their consumers, and then taking the spoils for themselves.
“For the past 20 years, big tech has dictated the business model for news by essentially mandating how news is distributed, either through search or social, and this has turned out to be pretty disastrous for most news organizations,” said Gabriel Kahn, a professor at USC’s Annenberg School for Communication and Journalism.
L.A. Taco operates on a tight budget; its publisher doesn’t take a salary. The site makes most of its money through memberships, so if people are getting the information directly from Google instead of paying to read L.A. Taco’s articles, that’s a major problem. Above, a staff meeting at its Chinatown office.
(Zoe Cranfill / Los Angeles Times)
To respond to the problem, news organizations have taken dramatically different approaches. Some, including the Associated Press, the Financial Times and News Corp., the owner of the Wall Street Journal and Dow Jones, have signed licensing deals to allow San Francisco-based OpenAI to use their content in exchange for payment. Vox Media and the Atlantic have also struck deals with the firm.
Others have taken their fights to court.
The New York Times in December sued OpenAI and Microsoft, alleging that both companies used its articles to train their digital assistants and share text of paywalled stories to its users without compensation. The newspaper estimated that those actions resulted in billions of dollars in damages.
Separately, last month Forbes threatened legal action against AI startup Perplexity, accusing it of plagiarism. After receiving Forbes’ letter, Perplexity said it changed the way it presented sources and adjusted the prompting for its AI models.
The company said it has been developing a revenue sharing program with publishers.
The New York Times said in its lawsuit that its battle against AI isn’t just about getting paid for content now; it’s about protecting the future of the journalism profession.
“With less revenue, news organizations will have fewer journalists able to dedicate time and resources to important, in-depth stories, which creates a risk that those stories will go untold,” the newspaper said in its lawsuit. “Less journalism will be produced, and the cost to society will be enormous.”
OpenAI said that the New York Times’ lawsuit was without merit and that it has been unable to reproduce examples the newspaper has cited of ChatGPT regurgitating paywalled articles. The company said publishers have a way to opt out of their sites being used to train AI tools. Microsoft did not respond to a request for comment.
The Associated Press, the Financial Times and News Corp., the owner of the Wall Street Journal and Dow Jones, have signed licensing deals to allow San Francisco-based OpenAI to use their content in exchange for payment.
(Michael Dwyer / Associated Press)
“Microsoft and OpenAI have the process entirely backwards,” Davida Brook, a partner at law firm Susman Godfrey, which is representing the New York Times, said in a statement. “Neither The New York Times nor other creators should have to opt out of having their works stolen.”
The legal war is spreading. In April, eight publications owned by private equity firm Alden Global Capital also accused OpenAI and Microsoft of using and providing information from its news stories without payment.
In some cases, OpenAI’s chat tool provided incorrect information attributed to the publications, Frank Pine, executive editor for MediaNews Group and Tribune Publishing, said in a statement. For example, according to Pine, OpenAI said that the Mercury News recommended injecting disinfectants to treat COVID-19 and the Denver Post published research suggesting that smoking cures asthma. Neither publication has made such claims.
“[W]hen they’re not delivering the actual verbatim reporting of our hard-working journalists, they misattribute bogus information to our news publications, damaging our credibility,” Pine said.
OpenAI said that it was “not previously aware” of Alden’s concerns and that it is “actively engaged in constructive partnerships and conversations with many news organizations around the world to explore opportunities, discuss any concerns, and provide solutions.”
One such partnership is OpenAI’s recent deal with News Corp., which allows the tech company’s tools to display content from news outlets in response to user questions and access content from the Wall Street Journal, New York Post and publications in the United Kingdom and Australia to train its AI models. The deal was valued at more than $250 million over five years, according to the Wall Street Journal, which cited unnamed sources. News Corp and OpenAI declined to comment on the financial terms.
“This landmark accord is not an end, but the beginning of a beautiful friendship in which we are jointly committed to creating and delivering insight and integrity instantaneously,” Robert Thomson, chief executive of News Corp. said in a statement.
“We are committed to a thriving ecosystem of publishers and creators by making it easier for people to find their content through our tools,” OpenAI said in a statement.
Although OpenAI has cut deals with some publishers, the tech industry has argued that it should be able to train its AI models on content available online and bring up relevant information under the “fair use” doctrine, which allows for the limited reproduction of content without permission from the copyright holder.
“As long as these companies aren’t reproducing verbatim what these news sites are putting out, we believe they are well within their legal rights to offer this content to users,” said Chris MacKenzie, spokesman for Chamber of Progress, an industry group that represents companies including Google and Meta. “At the end of the day, it’s important to remember that nobody has a copyright on facts.”
But outlets including the New York Times reject such fair-use claims, arguing that in some cases the chatbots do reproduce their content, unfairly profiting from their thoroughly researched and fact-checked work. The situation is even more difficult for smaller outlets such as L.A. Taco, which can’t afford to sue OpenAI or develop their own AI platforms.
Located in L.A.’s Chinatown with four full-time workers and two part-timers, L.A. Taco operates on a tight budget; its publisher doesn’t take a salary. The site makes most of its money through memberships, so if people are getting the information directly from Google instead of paying to read L.A. Taco’s articles, that’s a major problem.
Legislation is another potential way to deal with big tech’s disruption of the journalism industry. The California News Publishers Assn., of which the Los Angeles Times is a member, is sponsoring a state bill known as the California Journalism Preservation Act, which would require digital advertising giants to pay news outlets for accessing their articles, either through a predetermined fee or through an amount set by arbitration. Most publishers would have to spend 70% of the funds received on journalists’ salaries. Another bill lawmakers are considering would tax large tech platforms for the data they collect from users and pump the money into news organizations by giving them a tax credit for employing full-time journalists.
“The way out of this is some type of regulation,” USC’s Kahn said. “Congress can’t get anything done so that basically gives these platforms free rein to do what they want with very little consequence.”
Times editorial library director Cary Schneider contributed to this report.
Business
Cisco to lay off more than 400 workers in California
San José tech company Cisco plans to cut 471 workers in three Bay Area offices, according to layoff notices filed to a state agency.
The company, which provides networking devices along with other services including video conferencing and cybersecurity, told employees in May that it was going to cut fewer than 4,000 jobs or less than 5% of its workforce.
The notices, processed by the California Employment Development Department this week, provide more details about what jobs Cisco will cut in California.
The artificial-intelligence boom has fueled more investments in data centers, commercial real estate and other areas. But advancements in AI tools have also been reshaping jobs, especially in Silicon Valley, the epicenter of the tech industry.
Cisco’s layoffs in California impacted workers in its San José, Milpitas and San Francisco offices. The company cut a variety of roles in software engineering, product management, design, business operations and other areas, the notices show.
Cisco said it didn’t have anything additional to share beyond what it published in May about its restructuring plans.
Tech companies have been citing various reasons for layoffs including prioritizing investments in artificial intelligence. As workers use AI-powered tools to generate code, words and other content, some executives have said they don’t need as many employees. There’s also skepticism, though, about how big a role AI is playing at companies with a large amount of workers globally.
From January to May, U.S. technology companies announced 123,653 cuts, up 66% from the same period in 2025, according to a June report from global outplacement and executive coaching firm Challenger, Gray & Christmas. The firm said that AI was the leading reason companies cited for cuts but it still isn’t the “jobpocalypse some predicted.”
Meta, Snap, Block, Oracle and Amazon are among tech companies that have announced mass layoffs this year.
Cisco markets itself as a company that “provides critical infrastructure for the AI era” and has benefited from the AI boom, reaching a record revenue of $15.8 billion in the third quarter this year. The company’s net income grew 35% to $3.4 billion year-over-year during that quarter.
Cisco Chief Executive Chuck Robbins told employees in May it’s cutting costs in certain areas while prioritizing other investments. That includes employee use of AI across the company.
He said Cisco will be among winners in the AI era, but that means “making hard decisions — about where we invest, how we’re organized, and how our cost structure reflects the opportunity in front of us.”
As of July 2025, Cisco had roughly 86,200 employees, according to its annual report.
Business
Snap sued by parents of girl who was raped by man she met on Snapchat
Social media company Snap is being sued by the parents of a girl who was raped when she was 12 years old by a man she met on disappearing messaging app Snapchat.
The 111-page lawsuit, filed this week in a Missouri Circuit Court, alleges that Santa Monica-based Snap “enabled and facilitated the grooming, exploitation, and sexual abuse” of the minor who is referred to as “J.F.”
The company failed to disable or warn users about “dangerous” features that predators use on the app to find and abuse their victims, according to the lawsuit.
Missouri resident Gabriel Joel Valentin-Rios, who was 25 years old at the time, raped the girl in September 2021 after she sneaked out of her house, the lawsuit alleges. The parents are also suing the attacker, who pleaded guilty to sexually assaulting the girl and is serving 18 years in prison, according to the Social Media Victims Law Center.
The center and the Holland Law Firm announced Thursday they filed the lawsuit on behalf on the victim’s family.
“This assault did not happen in a vacuum — it happened because Snapchat’s product design made it easy for a predator to reach and manipulate an unsuspecting child,” said Matthew Bergman, founding attorney of the Social Media Victims Law Center, in a statement. “Snap executives have long known that their features create a perfect environment for predators to exploit children, yet they have repeatedly failed to make the platform safe.”
A Snap spokesperson said in a statement the company cares “deeply about the safety and well-being of all Snapchatters.”
“Our teams have worked for years to build safeguards, launch safety tutorials, partner with experts, and work with law enforcement to help prevent the misuse of our platform,” the spokesperson said in a statement.
The lawsuit is the latest legal hurdle facing Snap. Multiple parents who lost their children have previously sued the company, alleging that Snap failed to provide enough safeguards on the messaging app. Parents and child safety groups have voice concerns about how the app can be used to connect young people with drug dealers and child predators.
Other tech companies such as gaming platform Roblox, Google-owned YouTube and Facebook parent company Meta have also faced lawsuits over safety and mental health issues.
In March, a Los Angeles jury found that Meta-owned Instagram and YouTube were liable for the suffering of a California woman who alleged the platforms were built to addict young users. Snap settled that lawsuit before the trial started.
The latest lawsuit against Snap highlights safety concerns surrounding several features on the messaging app including “Quick Add,” which suggests users to connect with on Snapchat. Valentin-Rios used that feature to connect with the girl along with others to disguise his identity and groom her into sending explicit photos, the lawsuit said. The company’s “Snap Maps” feature allowed him to find the girl’s home address. And he used a cartoon avatar known as Bitmoji on Snapchat to conceal his age and present himself as a “a young, innocuous, and friendly looking boy.”
Families have faced challenges holding tech companies accountable for safety issues because a U.S. law shields platforms from being held liable for content posted by its users.
The lawsuit against Snap, though, says that it seeks to hold the company liable for the design and marketing of “unreasonably dangerous social media products.” It alleges that Snap co-created content such as Bitmojis abused by child predators and it designed the app to entice users to spend more time messaging others.
The lawsuit accused Snap of consistently turning a “blind eye” to underage users of its app. Snapchat requires users be at least 13 years old to sign up for an account, but J.F. started using the app when she was 11 years old. Snapchat was popular among her peers and friends so J.F. downloaded the app, which was presented as lighthearted and entertaining platform, without her parents’ knowledge or consent. The company failed to warn users about potential dangers, verify the ages of minors and lacks adequate parental controls, the lawsuit alleges.
Snapchat has a “family center” where parents can see their teen’s friends, view time spent and other insights about how their children are using the app. But the lawsuit said it isn’t enough because parents can’t restrict teens from sending private messages and children can create accounts without their parents’ knowledge.
The plaintiffs’ counsel also tested Snap’s “Quick Add” feature in 2023 and found that many of the usernames “generated by Snap’s recommendation algorithm appeared on their face to belong to predatory users,” the lawsuit said.
Valentin-Rios was also able to create a second Snapchat account with the username “Nocits21g” to connect with J.F. and to conceal the activity from his girlfriend, according to the lawsuit.
The rape victim, who was diagnosed with PTSD, anxiety and depression, started to engage in self-harm and expressed suicidal thoughts, the lawsuit states.
The lawsuit seeks a jury trial and financial damages for the harm allegedly caused by the company to the family.
“J.F. feels embarrassed and ashamed, but she is also angry that Snap facilitated this by design, and angrier still that Snap continues to operate its platform in the same manner today,” the lawsuit said.
Business
Newsom blesses Uber ballot measure truce — but fight over car crash lawsuits continues
Gov. Gavin Newsom signed a law Thursday to crack down on inflated profits stemming from car crash lawsuits, blessing a hard-fought compromise between Uber and the state’s trial attorneys that averts a November showdown between two of California’s most powerful and moneyed lobbying forces.
The deal, the fruit of months of negotiations, takes aim at the lucrative way doctors can charge for procedures on patients referred to them by personal injury lawyers.
If a law firm has a client who was hurt in a car accident, the lawyer will often send them to a doctor who will perform surgery on a “lien” basis, meaning the doctor will be paid from money that comes from a lawsuit settlement rather than through insurance.
Uber contends this arrangement has created an incentive for doctors and attorneys to collude to dramatically inflate medical bills. The more expensive the bill, they say, the bigger the resulting payout.
The law, SB 623, caps how much these doctors can charge when their patient is involved in a lawsuit against a ride-share company, which are frequent targets of litigation due to their top-of-the-line insurance policies. The new law will also require Uber to ramp up background checks of its drivers.
“We’re going to have a much safer state both for medical patients and passengers in Ubers,” said Nicholas Rowley, a prominent Texas attorney who helped bankroll the fight and took a leading role in the negotiations.
The law only applies to cases that involve ride-share accidents that take place after Jan. 1, 2027.
“This legislation puts meaningful guardrails in place to better protect accident victims, increase transparency and accountability in the medical lien system and strengthen safety,” said Ramona Prieto, Uber’s head of public policy for the Western U.S., in a statement.
For months, Uber and lawyers from across the state poured tens of millions into dueling ballot measures that threatened to devastate the profits of whichever side lost.
Uber fired the first shot with a ballot measure that sought to cap how much attorneys can earn in lawsuits involving auto accidents. The company argued attorneys were swindling their own clients, inflating medical bills of car crash victims to increase the value of the settlement and then pocketing a hefty chunk of the payouts.
The state’s trial attorneys countered that the fee cap would make small or difficult cases a money-losing endeavor and block scores of accident victims from the courts. They shot back with their own ballot measure that would increase legal liability for ride-share companies if a passenger or driver is sexually assaulted while on a ride, seizing on investigative reporting that highlighted assaults in Ubers.
“They were waiting for us to blink and we didn’t,” said Douglas Saeltzer, the head of the Consumer Attorneys of California, the lawyer trade group that pushed for the measure against Uber. “Their starting place, I don’t believe, was in the interest of protecting victims — it was in the interest of protecting Uber.”
With the passage of Thursday’s law, both sides have agreed to pull their respective measures from the November ballot, halting campaigns that had both parties amassing tens of millions in funding and blanketing the airwaves with ads.
“Now we can stop seeing all the commercials,” said Assemblymember Blanca Pancheo (D-Downey) at a Tuesday hearing.
The law, put forward by Assemblymember Diane Papan (D-San Mateo) and Sen. Thomas Umberg (D-Santa Ana), also caps the amount that can be earned by third-party investors who buy out a doctor’s lien in a personal injury case. These companies will purchase a doctor’s stake in the case at a reduced rate, then pocket a share of the payout if the case settles.
“Private equity and hedge funds buy them at a steep discount, then turn around and collect the full inflated amount,” Saeltzer said at a Tuesday hearing on the bill. “That’s money flowing to Wall Street investors, not patients.”
The law will require annual background checks for ride-share drivers and expand the list of offenses that disqualify someone from the job.
In addition to the ballot battle, has Uber sued two of LA’s most well-known personal injury firms — the Law Offices of Jacob Emrani and Downtown L.A. Law Group — accusing them of inflating medical bills and forcing clients to undergo needless and expensive surgeries to inflate the value of the claim. The firms asked the judge to dismiss the case Wednesday, arguing Uber had failed to prove fraud. Both firms have vehemently denied wrongdoing.
The lawsuit, filed last year, has put the plaintiff lawyers in the unusual position of playing defense. Listening in the audience at Wednesday’s hearings were the partners of Downtown L.A. Law Group and Jacob Emrani.
“Let’s be clear about what this Uber case really is,” said John Hueston, outside counsel for Emrani. “It’s brought by a $150 billion dollar company … to intimidate the plaintiff’s bar, exhaust its resources and chill the suits that hold Uber accountable.”
Michael Huston, one of the lawyers who represents Uber, countered that the case is “not an attack on the plaintiff’s bar.”
“We have brought suit against the two in this state … that are engaged in naked fraud,” he said.
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