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Jon Keegan

Thomson Reuters victorious in first major AI copyright case in US

The first battle in the war between publishers and AI companies is over, and a big publisher has emerged victorious.

News and legal publisher Thomson Reuters has won its lawsuit in the US District Court of Delaware against AI startup and competitor Ross Intelligence.

The original complaint said that Thomson Reuters’ Westlaw legal research database was “illicitly and surreptitiously used... to acquire access to and copy Plaintiffs’ valuable content” to create Ross Intelligence’s AI-powered tool, an alleged violation of the publisher’s copyright.

In a summary judgment, the judge found that Ross Intelligence’s claim of the “fair use” doctrine did not pass all of the four tests. The judge emphasized that Ross Intelligence failed the “most important element of fair use” — the fact that it was using Thomson Reuters’ data to develop a competing product.

Circuit judge Stephanos Bibas wrote:

“Even taking all facts in favor of Ross, it meant to compete with Westlaw by developing a market substitute... It does not matter whether Thomson Reuters has used the data to train its own legal search tools; the effect on a potential market for AI training data is enough. Ross bears the burden of proof. It has not put forward enough facts to show that these markets do not exist and would not be affected.”

But the case may not apply to some of the biggest, thorniest issues with the biggest AI copyright lawsuits still working their way through the courts. Ross Intelligence’s tool was not using generative AI (like ChatGPT), which takes a user’s query and synthesizes answers derived from vast amounts of training data that often includes copyrighted material.

Major cases brought by authors, artists, and news publishers, such as The New York Times’ lawsuit against OpenAI and partner Microsoft, have yet to settle such alleged copyright violations, which could have massive implications for the entire AI industry.

The original complaint said that Thomson Reuters’ Westlaw legal research database was “illicitly and surreptitiously used... to acquire access to and copy Plaintiffs’ valuable content” to create Ross Intelligence’s AI-powered tool, an alleged violation of the publisher’s copyright.

In a summary judgment, the judge found that Ross Intelligence’s claim of the “fair use” doctrine did not pass all of the four tests. The judge emphasized that Ross Intelligence failed the “most important element of fair use” — the fact that it was using Thomson Reuters’ data to develop a competing product.

Circuit judge Stephanos Bibas wrote:

“Even taking all facts in favor of Ross, it meant to compete with Westlaw by developing a market substitute... It does not matter whether Thomson Reuters has used the data to train its own legal search tools; the effect on a potential market for AI training data is enough. Ross bears the burden of proof. It has not put forward enough facts to show that these markets do not exist and would not be affected.”

But the case may not apply to some of the biggest, thorniest issues with the biggest AI copyright lawsuits still working their way through the courts. Ross Intelligence’s tool was not using generative AI (like ChatGPT), which takes a user’s query and synthesizes answers derived from vast amounts of training data that often includes copyrighted material.

Major cases brought by authors, artists, and news publishers, such as The New York Times’ lawsuit against OpenAI and partner Microsoft, have yet to settle such alleged copyright violations, which could have massive implications for the entire AI industry.

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Elon Musk’s SpaceX reportedly in talks to merge with xAI

Tesla CEO Elon Musk is reportedly exploring a merger between SpaceX and his artificial intelligence startup xAI, a move that would bundle rockets, satellites, the social media site X, and AI under one company ahead of SpaceX’s long-anticipated IPO.

According to Reuters reporting, the deal would swap xAI shares for SpaceX stock, potentially valuing the combined operation north of $1 trillion.

Reuters reports:

Two entities have been set up in Nevada to facilitate the transaction, the person said.

Reuters could not determine the value of the deal, its ‌primary rationale, or its potential timing.

Corporate filings in Nevada show that those entities were set up on January 21. One of them, a limited liability company, lists SpaceX ​and Bret Johnsen, the company's chief financial officer, as managing members, while the other lists Johnsen as the company's only officer, the filings show.

The combined companies could also set the narrative groundwork for putting data centers in space — an idea that Musk and a number of other tech billionaires have been floating lately but that may not get off the ground.

In its earnings filings yesterday, Tesla disclosed that it recently made a $2 billion investment in xAI. Last year Musk’s xAI bought Musk’s X in an all-stock deal.

Reuters reports:

Two entities have been set up in Nevada to facilitate the transaction, the person said.

Reuters could not determine the value of the deal, its ‌primary rationale, or its potential timing.

Corporate filings in Nevada show that those entities were set up on January 21. One of them, a limited liability company, lists SpaceX ​and Bret Johnsen, the company's chief financial officer, as managing members, while the other lists Johnsen as the company's only officer, the filings show.

The combined companies could also set the narrative groundwork for putting data centers in space — an idea that Musk and a number of other tech billionaires have been floating lately but that may not get off the ground.

In its earnings filings yesterday, Tesla disclosed that it recently made a $2 billion investment in xAI. Last year Musk’s xAI bought Musk’s X in an all-stock deal.

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Driverless Waymo struck a child near school in California

A Google Waymo struck a child near a Santa Monica elementary school during morning drop-off last week, as self-driving cars by Waymo, Tesla, and others continue their expansion across the country. In a blog post, Waymo said the fully driverless car detected the child as they emerged from behind a parked SUV, braked sharply, and reduced speed from approximately 17 mph to under 6 mph before striking the child. The child suffered minor injuries and walked away.

The company reported the incident to the National Highway Traffic Safety Administration, which is currently investigating, adding fresh scrutiny to how robotaxis perform in the wild.

The company reported the incident to the National Highway Traffic Safety Administration, which is currently investigating, adding fresh scrutiny to how robotaxis perform in the wild.

tech

Digging into Microsoft’s cloud backlog

Microsoft’s Azure cloud computing unit is seeing huge demand. In yesterday’s second-quarter earnings call, Microsoft CFO Amy Hood said the company’s commercial bookings increased 230% thanks to large commitments from OpenAI and Anthropic and healthy demand for its Azure cloud computing platform.

Hood said that the company’s “remaining performance obligations” (RPO) ballooned to a staggering $625 billion, up 110% from the same period last year. How long will it take for Microsoft to fulfill these booked services? Hood said the weighted average duration was “approximately two and a half years,” but a quarter of that will be recognized in revenue in the next 12 months.

Shares of Microsoft tanked today, down over 11%, despite the strong beat on revenue and earnings. The drop puts the stock on track to have its worst single-day drop since March of 2020.

Investors may be concerned that while huge, that extra demand was coming only from OpenAI, an issue that Oracle recently experienced.

But Hood said the non-OpenAI RPO still grew 28% year on year, which reflects “ongoing broad customer demand across the portfolio.”

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Meta and Tesla are funding the future with their core businesses — but only one of them is still growing

The two tech giants, on back-to-back earnings calls, made it sound like they’re selling the same AI-powered future. But the picture of the underlying businesses, and how they’re using AI to furnish current sales, couldn’t be more different.

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