The New York Times Company v. Microsoft Corporation - Part 17 - F. Profit to Defendants

IV. FACTUAL ALLEGATIONS

F. Profit to Defendants

143. Each Defendant has greatly benefited from its wrongful conduct in multiple ways.

144. Each Defendant has reaped substantial savings by taking and using—at no cost— New York Times content to create their LLMs. Times journalism is the work of thousands of journalists, whose employment costs hundreds of millions of dollars per year. Each Defendant has wrongfully benefited from nearly a century of that work—some performed in harm’s way—that remains protected by copyright law. Defendants have effectively avoided spending the billions of dollars that The Times invested in creating that work by taking it without permission or compensation.

145. Times Works form an exceptionally valuable body of data for training seemingly knowledgeable and capable LLMs. Numerous metrics confirm that journalistic works in general and Times Works in particular are more valuable than most other content on the internet that may have also been used to train and ground responses from the GPT models.

146. Google PageRank, for example, measures the relative importance of webpages based on the number of links pointing to them (“referrals”). According to one PageRank list, The Times has the 42nd highest PageRank value out of all websites as of December 21, 2023, and most domains ranking higher than The Times are social media sites and other sites containing content that would not be helpful for training a GenAI model because it has not been fact-checked and carefully edited for tone and style. [37] As of December 21, 2023, the only text-based content sites ranking above The Times are Wikipedia, Wordpress, and Medium.[38]

147. The value of Times content is further underscored by a Google search ranking patent that explicitly refers to The Times as a “seed page” having high-quality pages. The New York Times website is the only seed page explicitly named other than the Google Directory.[39]

148. Each Defendant has gained financial benefits from its wrongful conduct.

149. In April 2023, ChatGPT had approximately 173 million users.[40] A subset of those users pay for ChatGPT Plus, for which OpenAI charges users $20 per month.[41] When announcing the release of ChatGPT Enterprise, a subscription-based high-capability GPT-4 application targeted at corporate clients, in August 2023, OpenAI claimed that teams in “over 80% of Fortune 500 companies” were using its products.[42]

150. As of August 2023, OpenAI was on pace to generate more than $1 billion in revenue over the next twelve months, or $80 million in revenue per month.[43]

151. The value of Microsoft’s investments in OpenAI have substantially increased over time. Microsoft initially invested $1 billion in OpenAI in 2019, an investment that one publication has said may be “one of the shrewdest bets in tech history.”[44] In 2021, OpenAI was valued at $14 billion; just two years later, in early 2023, it was valued at approximately $29 billion.[45] Microsoft eventually increased its investment in OpenAI to a reported $13 billion. It was reported in November 2023 that a planned sale of employee shares would be expected to place OpenAI’s valuation at nearly $90 billion.[46]

152. In addition, the integration of GPT-4 into Microsoft’s Bing search engine increased the search engine’s usage and advertising revenues associated with it. Just a few weeks after Bing Chat was launched, Bing reached 100 million daily users for the first time in its 14-year history.[47] Similarly, page visits on Bing rose 15.8% in the first approximately six weeks after Bing Chat was unveiled.[48]

153. Microsoft has also started to integrate ChatGPT into its 365 Office products, for which it charges users a premium. Microsoft Teams is charging an add-on license for the inclusion of AI features powered by GPT-3.5.[49] Microsoft is also charging $30 per user per month for Microsoft 365 Copilot, a tool powered by GPT-4 that is designed to assist with the creation of documents, emails, presentations, and more.[50] That $30 per user per month premium will nearly double the cost for businesses subscribed to Microsoft 365 E3, and will nearly triple the cost for those subscribed to Microsoft 365 Business Standard.[51]

[37] Top 10 Million Websites, DOMCOP, https://www.domcop.com/top-10-million-websites (last visited Dec. 21, 2023).

[38] Id.

[39] U.S. Patent No. 9,165,040 (filed Oct. 20, 2015).

40 Nerdynav, 107 Up-to-Date ChatGPT Statistics & User Numbers [Dec 2023], NERDYNAV,

https://nerdynav.com/chatgpt-statistics/ (last updated Dec. 6, 2023).

41 OpenAI, Introducing ChatGPT Plus, OPENAI (Feb. 1, 2023), https://openai.com/blog/chatgpt-plus.

42 Introducing ChatGPT Enterprise, supra note 5.

43 Amir Efrati & Aaron Holmes, OpenAI Passes $1 Billion Revenue Pace as Big Companies Boost AI Spending, THE INFORMATION (Aug. 29, 2023), https://www.theinformation.com/articles/openai passes-1-billionrevenue-pace-as-big-companies-boost-ai-spending.

44 Hasan Chowdhury, Microsoft's Investment into ChatGPT's Creator May Be the Smartest $1 Billion Ever Spent, BUSINESS INSIDER (Jan. 6, 2023), https://www.businessinsider.com/microsoft openai-investment-thesmartest-1-billion-ever-spent-2023-1.

45 Phil Rosen, ChatGPT's Creator OpenAI Has Doubled in Value Since 2021 as the Language Bot Goes Viral and Microsoft Pours in $10 Billion, BUSINESS INSIDER (Jan. 24, 2023), https://markets.businessinsider.com/news/stocks/chatgpt-openai-valuation-bot-microsoft-language-google-techstock-funding-2023- 1#:~:text=In%202021%2C%20the%20tech%20firm,%2410%20billion%20investment%20in%20OpenAI.

46 Aditya Soni, Microsoft Emerges as Big Winner from OpenAI Turmoil, REUTERS (Nov. 20, 2023),

https://www.reuters.com/technology/microsoft-emerges-big-winner-openai-turmoil-with-altman-board-2023-11-20/.

[47] Tom Warren, Microsoft Bing Hits 100 Million Active Users in Bid to Grab Share from Google, THE VERGE (Mar. 9, 2023), https://www.theverge.com/2023/3/9/23631912/microsoft-bing-100-million-daily-activeusers-milestone.

[48] Akash Sriram and Chavi Mehta, OpenAI Tech Gives Microsoft's Bing a Boost in Search Battle with Google, REUTERS (Mar. 22, 2023), https://www.reuters.com/technology/openai-tech-gives-microsofts-bing-boostsearch-battle-with-google-2023-03-22/.

[49] Tom Warren, Microsoft Launches Teams Premium with Features Powered by OpenAI, THE VERGE (Feb. 2, 2023), https://www.theverge.com/2023/2/2/23582610/microsoft-teams-premium-openai-gpt-features.

[50] Tom Warren, Microsoft Announces Copilot: The AI-Powered Future of Office Documents, THE VERGE (Mar. 16, 2023), https://www.theverge.com/2023/3/16/23642833/microsoft-365-ai-copilot-word-outlook-teams; Tom Warren, Microsoft Puts a Steep Price on Copilot, Its AI-Powered Future of Office Documents, THE VERGE (July 18, 2023), https://www.theverge.com/2023/7/18/23798627/microsoft-365-copilot-price-commercial-enterprise.

[51] Microsoft Announces Copilot: The AI-Powered Future of Office Documents, supra note 49.