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Social media giant Reddit has launched a lawsuit against artificial intelligence company Perplexity, alleging it illegally deleted users’ posts to train its AI model, marking the latest data rights dispute between content owners and the AI industry.
The complaint filed Wednesday in New York federal court also named three defendants, who Reddit claims helped Perplexity collect its data: Lithuanian data scraper Oxylabs, “former Russian botnet” AWMProxy and Texas startup SerpApi.
Reddit alleged that the three small entities were able to extract its copyrighted content “by disguising their identities, hiding their locations, and disguising their web scrapers as ordinary people.”
Perplexity, which runs an AI-powered search engine, denied the allegations and accused Reddit of “extortion” and opposition to an open internet, while SerpApi told CNBC it “strongly disagreed” with Reddit’s claims and intended to defend itself in court.
The case represents one of several complaints filed by content owners accusing AI companies of using copyrighted material without permission to train their large language models. Reddit, in particular, has been on the front lines of this battle, having launched a similar lawsuit against AI startup Anthropic in June. CNBC was unable to reach Oxylabs and AWMProxy.
In a statement shared with CNBC, Ben Lee, Reddit’s chief legal officer, said AI companies are “locked in an arms race for quality human content” and that pressure has fueled an “industrial-scale ‘data laundering’ economy.”
Scrapers circumvent technological protections to steal data, then sell it to customers hungry for training materials. Reddit is a prime target because it is one of the largest and most vibrant collections of human conversations ever created.
Reddit — which hosts more than 100,000 interest-based “subreddit” communities — said in its lawsuit that its users’ posts had become the most frequently cited source for AI-generated responses on Perplexity.
He added that he sent Perplexity a cease and desist letter, after which he increased the volume of quotes on Reddit “forty-fold.”
AI researchers have previously noted that the large volume of moderated conversations on Reddit can help AI chatbots produce more natural responses.
In the age of artificial intelligence, Reddit has worked to leverage its massive pool of data, allowing access only through AI-related licensing deals. The social media company has signed such agreements with OpenAI and Alphabetit’s Google.
In response to the lawsuit, Perplexity, in a post on the Reddit platform, argued that it does not train AI models on content, but simply summarizes and cites public discussions on Reddit. Therefore, he said it was “impossible” to sign a licensing agreement.
“A year ago, after we explained this, Reddit insisted that we pay anyway, even though we were legally accessing Reddit’s data. Bowing to strong-arm tactics is simply not the way we do business,” the statement said, going on to describe the lawsuit as a “show of force in Reddit’s training data negotiations with Google and OpenAI.”
“Perplexity believes this is a sad example of what happens when public data becomes a significant part of a public company’s business model,” Perplexity added, noting that data licensing has become an increasingly important source of revenue for Reddit.
In February, Jen Wong, Reddit’s chief operating officer, told trade publication Adweek that AI licensing deals with Google and OpenAI accounted for nearly 10% of Reddit’s revenue.
