Microsoft and OpenAI Knew About the 'Doom Loop' for Publishers
Declassified documents from the publishers' lawsuit show that Microsoft and OpenAI knew from the start that AI destroys media. Internal quotes — about 'the largest theft of labor in history.'
Declassified documents included in publishers' lawsuit against OpenAI and Microsoft show that both companies openly discussed the risk that generative AI would destroy its own content suppliers — publishers.
Critics of the technology have long pointed to the 'doom loop': AI devours publishers' content, and when publishers go bankrupt, the models will have nothing left to 'scrape.' As it turns out, the AI companies themselves understood this risk from the very beginning. The relevant correspondence and internal documents are part of the case materials in a lawsuit filed against OpenAI and Microsoft by news organizations. Some of the most incriminating quotes were collected by the Orlando Sentinel — one of the plaintiffs.
'It is extremely unusual for an end product to threaten the economic foundations of its key suppliers, but that is precisely the situation we have created,' says a declassified Microsoft document.
Microsoft's director of applied science Brent Hecht, in another document, calls the 'vacuuming up' of the labor of millions of journalists by AI models potentially 'the largest theft of labor in human history.'
OpenAI President Greg Brockman, according to the case materials, replied 'ah nice' when shown how the company's technology bypasses publishers' paywalls to collect content.
Microsoft said Hecht was hired as a 'contrarian analyst' and that his position does not reflect the company's actual views. OpenAI declined to comment on the materials for the Sentinel.
Attorney Steven Lieberman, representing the NY Daily News, argues that the documents prove Microsoft and OpenAI knowingly commit theft and harm publishers, rather than acting in good faith under the protection of the fair use doctrine.
Jason Koebler of 404 Media described the documents as 'the most honest confession of guilt' he has seen in his life.
Fortnite: Collaborations That Harm
IKEA recently surprised the market with an integration into the game The Elder Scrolls V: Skyrim. Fortnite is the complete opposite: the cognitive dissonance from its brand collaborations can harm partners.
The multiplayer shooter is now overflowing with licensed crossover skins: from Peter Griffin and John Wick to SpongeBob and Lady Gaga — all of them firing machine guns and performing TikTok dances over the bodies of their opponents.
The problem, as Sam Greszes writes in Aftermath, is that the crossovers often contradict the brand suitability requirements of the rights holders themselves. That's why, in the Sonic the Hedgehog collaboration, Sega's characters are presented as robots: the company insists that the 'real' Sonic must never hold a weapon.
Licensing mistakes come at a cost. Last year, developer Epic Games removed a Fortnite emote featuring a dance from the series 'Peacemaker' after a plot twist in the HBO series linked the dance to Nazi symbolism.
Streaming: Ads Instead of Subscriptions
Analyst firm Forrester predicts that three major streaming services will abandon the 'paid subscription only' model and launch free ad-supported tiers.
Most streamers already offer hybrid plans, but even ad-supported plans typically require a paid subscription. Consumers, meanwhile, are not willing to pay much for content with ad breaks. At the same time, streamers need advertising revenue to grow average revenue per user (ARPU) and stay in Wall Street's good graces.
Forrester names Disney+ as the most likely candidate to launch a free tier: this summer the company was already exploring the possibility. Netflix, famously opposed to advertising until 2022, hinted at a fully ad-supported tier during its second-quarter earnings call.
Streamers are aggressively raising subscription prices. But the fact that prices for ad-supported tiers are rising more slowly than for ad-free ones suggests the platforms understand that consumers are close to their limit of patience.
In Brief
- English football club Oxford United apologized for an advertising campaign featuring 'United 93' jerseys — that was the call sign of one of the planes hijacked on September 11. [BBC]
- Meta's new personal AI agent requires a high level of user trust, but many don't trust the company. [WSJ]
- American AI companies are slowing development over safety concerns. Will Chinese ones follow? [The Information]
- Brown Brothers Media is a startup that buys up news sites and turns them into content farms. [Futurism]
Personnel Appointments
- Karandeep Anand has become Disney's first-ever CTO. He previously led Character.AI — a chatbot service that Disney accused of copyright infringement in 2025. [Deadline]
- Disney also appointed Adam Smith chairman of the direct-to-consumer division at Disney Entertainment. [Adweek]
- BionicVO LLC, a company that replicates actors' voices using AI, has entered a partnership with Yaman Media Group LLC. The latter's founder, Yaman Coskun, has become BionicVO's director of strategic partnerships. [Inside Radio]
- Jay Wolff has joined Hologram Media Network as chief growth officer. [press release]
Source: AdExchanger; Source: apnews.com
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