Perplexity denies 'data theft' allegations in Reddit lawsuit
What's the story
Perplexity, an artificial intelligence (AI) company founded by Aravind Srinivas, has denied allegations of "data theft" after Reddit filed a lawsuit against it and three other companies. The case was filed on October 22 in a New York federal court. Reddit accused these companies of illegally scraping user comments from its platform for commercial purposes.
Legal battle
Perplexity's response to Reddit's claims
Reddit has described the alleged scraping as an "industrial-scale, unlawful" operation that harvested millions of user comments without consent. In response, Perplexity called the lawsuit a "sad example" of the risks associated with public data in a public company's business model. The company stressed that it doesn't train foundation models and its use of Reddit content is limited to summarizing discussions and citing threads for verification purposes.
Licensing dispute
'Reddit demanded payment,' AI firm alleged
Perplexity has also refuted Reddit's claim that it ignored the platform's licensing requests. The company said this was "untrue," as an "application-layer company," it can't sign a license agreement for training models on content. Perplexity further alleged that Reddit demanded payment despite lawfully accessing its data, which the AI firm refused, calling it "strong-arm tactics."
Targeted entities
Other companies named in Reddit's lawsuit
The lawsuit by Reddit specifically targets the infrastructure used by the AI industry to acquire training data. Apart from Perplexity, it also names Lithuanian data-scraping company Oxylabs UAB, web domain AWMProxy, and Texas-based start-up SerpApi. This is Reddit's second such lawsuit after a similar action against another major AI company, Anthropic, in June.
Revenue stream
The crux of the matter
Reddit has previously signed licensing agreements with Google and OpenAI, allowing them to train their AI systems on user-generated content. These deals have become an increasingly important revenue stream for the social media platform. However, Perplexity noted that model makers are cutting back on deals with Reddit or walking away completely due to recent earnings reports.