'The largest theft of labor in human history:' Court docs reveal Microsoft exec predicted AI 'doom loops' could hollow out the internet
Court documents reveal Microsoft’s Brent Hecht warned AI answer engines could collapse the web’s economic model, citing up to 93% traffic drops for publishers like The New York Times.
Internal Microsoft documents cite a 93% drop in click-through rates for The New York Times when Copilot’s answer engine surfaced content directly, according to Microsoft director Brent Hecht. He described the practice as a 'doom loop,' where AI systems extract value from publishers without compensation, undermining their revenue streams. The filing highlights Microsoft’s internal data showing similar declines for Ziff Davis properties, including IGN and Eurogamer, with drops ranging from 51% to 94%. Hecht labeled the phenomenon 'the largest theft of labor in human history' in a January memo, framing it as an existential threat to the content supply chain.
Microsoft CEO Satya Nadella testified under oath that he would have required OpenAI to retrain its models if he knew paywalled content was used for training. The documents also reveal an OpenAI researcher’s suggestion to bypass The New York Times paywall for scraping, to which OpenAI president Greg Brockman responded 'ah nice.' Brockman later wrote in internal notes that large language models are 'very good at any news task,' reflecting the company’s prioritization of AI capabilities over publisher rights.
The legal filing challenges the fair use defense often cited by AI companies, arguing that AI-generated answers directly harm publishers’ ability to monetize their work. The dispute centers on whether AI systems, by providing immediate answers without clicks, deprive publishers of traffic and ad revenue essential to their operations. Microsoft’s internal analysis suggests the economic impact extends beyond individual publishers, threatening the broader web ecosystem that relies on content monetization.
The revelations come amid growing scrutiny of AI’s role in reshaping digital media economics, with publishers increasingly vocal about the need for regulatory or industry solutions. The documents underscore tensions between AI developers and content creators, highlighting a potential conflict between innovation and the sustainability of independent journalism. The case raises questions about the long-term viability of ad-supported models in an era dominated by AI-driven search and answer engines.