Social media platform Reddit has sued Perplexity for unlawfully scraping its data to train the AI startup’s AI-based search engine, accusing it of building a $20 billion firm off stolen data.

According to reports, Reddit sued three other companies in a New York federal court on Wednesday, alleging that the data-scraping companies circumvented its data protection measures to “steal data that Perplexity desperately needs” to train its “answer engine.” This latest case is one of the many filed by content creators against tech firms over the alleged misuse of copyrighted material to train their AI systems.

News publishers in particular argue that AI firms’ actions of using their content without authorization are taking away their readership and their advertising revenue, subsequently threatening already fragile business models.

Perplexity defends itself against Reddit’s “threats”

In response to Reddit’s allegations, Perplexity defended its methods.

“Our approach remains principled and responsible as we provide factual answers with accurate AI, and we will not tolerate threats against openness and the public interest,” the startup said in a statement.

In June this year, Reddit, which is comprised of thousands of interest-based “subreddit” communities, filed a similar lawsuit against another AI startup Anthropic, which is still ongoing.

“AI companies are locked in an arms race for quality human content—and that pressure has fueled an industrial-scale ‘data laundering’ economy.”

Reddit chief legal officer Ben Lee.

Reddit claims it is the most commonly cited source for AI-generated answers. It has licensing agreements with other major tech companies like Google and OpenAI for training their AI systems.

In the latest lawsuit, it alleges that Perplexity, which currently does not have a licensing agreement with Reddit to use its content, worked with at least three data-scrapping companies, namely Lithuania-based Oxylabs, Russia-based AWMProxy, and SerpApi, which is based in Texas. Reddit is accusing these firms of illegally scraping its data from billions of search results.

According to the court papers, Reddit sent Perplexity a cease-and-desist letter last year. But Perplexity allegedly went on and “increased the volume of citations to Reddit forty-fold” after receiving the letter.

Spokespersons for the other three companies did not immediately comment on the matter. Reddit is also reportedly asking for unspecified monetary damages and an order to block Perplexity from using its data.

For Perplexity, this is not new, as it adds to a string of legal actions against the AI startup over copyright infringement.

In August, two major Japanese media groups, Nikkei and Asahi Shimbun, jointly filed a lawsuit at a Tokyo District Court against Perplexity AI over copyright infringement.  As was previously reported by Cryptopolitan, they also alleged that the AI search engine firm provided incorrect information attributed to their articles, which could potentially hurt their credibility, according to the media groups.

Nikkei and Asahi Shimbun were demanding 2.2 billion yen or $14.7 million in damages each. They also asked Perplexity to delete their stored articles.

But that’s not all. Prior to this, the New York Post and Rupert Murdoch’s Dow Jones also alleged that Perplexity was hurting their businesses by diverting customers and revenues away from news publishers through using their content to respond to questions on their platforms via its chatbot.

Adding to the list of publishers, the BBC also demanded that Perplexity cease to use their content in a “cease and desist” letter. Other news outlets, such as the New York Times and Conde Nast, have also delivered similar letters to the AI company asking them to cease using their content without permission.

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