← Blog

New York Times v. OpenAI & Microsoft: Inside the "Largest Theft of Labor" AI Copyright Showdown

October 7, 2026

On September 17, 2026, a stack of newly unredacted court papers turned the most important AI copyright case in America into front-page news all over again. In a summary-judgment brief filed in The New York Times Company v. Microsoft Corporation, lawyers for The New York Times quoted a Microsoft research director who had privately described AI training on other people's work as "an astonishing theft of unprecedented proportions" and "perhaps the largest theft of labor in human history." Within a day the line was in Reuters, the Washington Post, the Financial Times, TechCrunch, Engadget, and dozens of other outlets. Nearly three years after it was filed, the case is now heading toward the ruling that may decide whether training AI on copyrighted work without permission is legal.

The case, No. 1:23-cv-11195, was filed December 27, 2023 in the U.S. District Court for the Southern District of New York. It is now the lead case in a consolidated group of lawsuits before Judge Sidney H. Stein that includes other news publishers, among them the Daily News, as well as book authors. The defendants are Microsoft and OpenAI. The claim is copyright infringement under 17 U.S.C. § 501, plus a related claim that the companies stripped copyright-management information out of the Times' articles.

What the lawsuit says

The Times' theory has stayed the same since 2023. OpenAI and Microsoft copied millions of its articles in full, without permission, to build commercial products: ChatGPT and Microsoft's Copilot. Those products, the Times says, now compete with the journalism they were built from. The newspaper is asking for liability on four kinds of copying: scraping its articles (most of them behind a paywall), training models built to predict that expressive text, using its content in real-time chatbot answers, and the two companies sharing the copied material with each other. Press reports put the publishers' count at roughly 10.8 million articles taken.

On September 4, 2026, both sides moved for summary judgment, which means each asked Judge Stein to decide key questions without a trial. OpenAI asked the court to rule that pretraining and its "Browse" feature are fair use. It also argued that copies Browse made before publishers updated their robots.txt files were impliedly licensed, and that the copyright-management claim fails as a matter of law. Microsoft asked for judgment on every claim against it. The defendants rely heavily on two 2025 decisions from federal courts in California, Kadrey v. Meta and Bartz v. Anthropic, in which judges found that training AI models on books was transformative fair use. OpenAI also reportedly told the court it found only 24 verbatim reproductions of Times content across 20 million ChatGPT logs. The U.S. Justice Department filed a brief backing OpenAI, arguing that training on millions of works produces a "transformative public benefit" that outweighs harm to publishers.

The September 17 unsealing gave the Times' side of the story. According to the partly unredacted brief, as reported by TechCrunch, Bloomberg Law, 404 Media, and others:

Microsoft says Hecht's comments "reflect one employee's individual perspective, are not a legal analysis, and do not represent the company's views," and that Copilot is not a substitute for journalism. TechCrunch noted that most of the quotes come from the Times' own brief, while the underlying exhibits remain sealed, so they are shown without their full context. Nothing has been decided. These are allegations and advocacy on both sides.

The hard part: fair use turns on substitution, not copying

The quotes got the headlines, but the legal fight is narrower, and more useful to understand. Nobody seriously disputes that OpenAI copied the Times' articles. The question is whether that copying is fair use, which courts decide by weighing four factors: the purpose and character of the use, the nature of the work, how much was taken, and the effect on the market for the original.

The California rulings the defendants rely on leaned on the first factor. Training, those judges said, is "transformative" because a model learns patterns instead of republishing the books. But the Supreme Court's 2023 decision in Andy Warhol Foundation v. Goldsmith made clear that being transformative is not enough when the new use serves the same purpose as the original and competes with it. That is why the Times has built its case around the fourth factor, market substitution, and why lines like "largely substitutive, period" and "users won't click" matter so much. The Times argues that the California authors never showed AI outputs replacing their books. A newspaper whose traffic collapses when a chatbot answers the question instead may be able to show exactly that.

The second issue is just as relevant for creators: how the copies were obtained. Getting around a paywall and stripping copyright notices are not just bad optics. Removing copyright-management information can create separate liability under the DMCA (17 U.S.C. § 1202), and courts weighing fair use have started looking hard at whether the source material was taken from pirate libraries or from behind access controls. In Bartz v. Anthropic, the same judge who called training fair use let the claims over pirated books go forward. That exposure led to a reported $1.5 billion settlement.

Why it matters if you make films, not newspapers

It is easy to treat this as a fight between giants. But how Judge Stein rules on substitution will shape what every creator can do when an AI system is trained on their screenplay, their footage, their score, or their poster art. Here is what to take from it now:

Opposition briefs on the cross-motions are reportedly due in late October, with replies in November. Judge Stein will then decide whether all or part of the case goes to trial, which could happen in 2027. Whatever he decides will likely be the most-cited AI copyright ruling to date, and it will reach well beyond newsrooms. We'll track the briefing and any ruling as it lands. Follow the filings, parties, and coverage on the case page.

This post is editorial commentary on public court filings and news coverage, not legal advice. The allegations described are unproven and the defendants dispute them. Quoted internal statements come from a party's brief and may lack context, and being named as a defendant is not evidence of liability. Details come from press reports on the docket and may be refined as the case develops.