OpenAI, Microsoft Knew AI Threatened Publishers 2026

Newly unsealed filings reveal what AI executives said privately about journalism's future. Image: TechPulse USA

Published September 19, 2026 · By TechPulse USA

The tech giants' own words may be their undoing. Newly unsealed court filings reveal that executives at OpenAI and Microsoft privately described their AI products as substitutes for journalism — even as the companies argue in federal court that those same products don't compete with the press.

The previously redacted portions of the filing, made public Thursday in Manhattan federal court, contain quotes the news outlets say "eviscerate" the companies' fair-use defense.

The unsealed quotes nobody expected to read

The lawsuit was first filed in December 2023 by The New York Times, which accused OpenAI and its largest financial backer Microsoft of using millions of newspaper articles without permission to train ChatGPT. Since then the case has grown into a consolidated battle involving the Chicago Tribune, the New York Daily News and other Alden Global Capital papers.

Thursday's unsealing produced the headline quote: OpenAI's head of ChatGPT, Nick Turley, privately said publishers face an "existential threat" from AI products that are "largely substitutive" — and "will get more and more substitutive as they get better."

"The evidence revealed here for the first time shows that OpenAI and Microsoft knew that what they were doing was wrong." — Steven Lieberman, attorney for the New York Daily News and seven other newspapers

"Ah nice": the paywall hack that will haunt OpenAI

The filings also quote OpenAI co-founder and president Greg Brockman writing that large language models are "'particularly good at predicting text of news articles,' 'excellent at news,' and 'very good at any news task.'" Then came the line that will be replayed in every courtroom summary: when Brockman was told OpenAI employees had discovered a "hack" to get around The New York Times' paywall, he responded, "ah nice."

OpenAI employees discussed skirting news sites' paywalls, and leaders at both companies said their products replaced the need for users to visit original sources.

Satya Nadella's own words, under oath

Perhaps the most damaging testimony comes from Microsoft CEO Satya Nadella himself. Under oath, he agreed that conversing with chatbots "has substituted ... giving you the information right there on the website on the AI platform versus needing to go to the underlying source."

Microsoft pushed back hard on that reading. "Satya's testimony and Microsoft's position in this case are perfectly consistent," a spokesperson said Thursday, arguing he "spoke to broad principles and changes underway in how people find and consume information" — and that those observations "should not be confused with conclusions about copyright questions before the Court."

The "astonishing theft" memo

The other bombshell comes from Brent Hecht, Microsoft's director of applied science, who wrote that "millions of people" would consider AI companies "'hoovering up' all their work" to be "an astonishing theft of unprecedented proportions." Hecht warned of a "doom loop" in which AI's content strategy hurts both the models and the web itself: "It is highly unusual that an end-product threatens the economic foundations of its essential suppliers."

Microsoft's response: Hecht's comments "reflect one employee's individual perspective, are not a legal analysis, and do not represent the company's views."

Fair use is the whole case — and it's wobbling

OpenAI and Microsoft have argued their training on millions of articles is protected as fair use because it transforms copyrighted material into new content and does not compete with or replace journalism. The unsealed quotes attack both halves of that defense: the products are substitutive (Turley, Nadella) and the companies knew it (Brockman, Hecht).

The case sits before US District Judge Sidney Stein in Manhattan, with both sides asking for rulings in their favor on the fair-use question. Notably, the Trump administration weighed in on September 1, telling Stein that AI training is "extraordinarily" transformative — a significant thumb on the scale for the tech companies.

What this means for you

This case will quietly decide the economics of the information you consume every day. If the publishers win, AI companies may have to pay for the content they train on — which could mean chatbots that cite and compensate sources, or pricier AI subscriptions. If the tech companies win, the free-training era continues, and the slow drain of ad revenue from publishers to AI platforms accelerates.

And the uncomfortable part the companies' own staff flagged: if Hecht's "doom loop" plays out — AI starves publishers, publishers produce less — the quality of your AI's answers degrades too. Your chatbot is only as good as the reporting it was trained on.

Our honest verdict

The filings are devastating as public relations and genuinely dangerous as law. When your CEO admits substitution under oath and your co-founder says "ah nice" to a paywall hack, "we didn't compete with publishers" becomes very hard to argue with a straight face.

But fair use was written for human creators remixing culture, not for models ingesting the entire web — and with the administration backing the "extraordinarily transformative" view, the publishers are fighting uphill. Our read: the quotes make a trial loss for the tech companies much more likely — but a settlement with licensing deals remains the most probable ending.

FAQ

What is the NYT lawsuit against OpenAI and Microsoft about?
Filed in December 2023, it accuses the companies of using millions of Times articles without permission to train ChatGPT and Copilot. Other newspapers later joined the consolidated case.

What did the unsealed filings reveal?
Private quotes acknowledging AI products substitute for journalism — Turley's "existential threat" remark, Brockman's "ah nice" reply to a paywall hack, and Nadella's under-oath admission of substitution.

What is the fair-use defense?
The companies argue training AI on copyrighted articles is fair use because it transforms the material into something new and doesn't compete with the originals. The news outlets say the unsealed quotes destroy that argument.

How did Microsoft respond?
It said Nadella's testimony was consistent with its legal position and addressed broad information trends, and dismissed Brent Hecht's "astonishing theft" memo as one employee's personal perspective.

Sources: Reuters (Sept. 17, 2026); The Wall Street Journal (Sept. 18, 2026); Bloomberg Law (Sept. 2026).

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