News Corp CEO Robert Thomson slams AI firms for stealing copyrighted material like Trump's ‘Art of the Deal'

News Corp CEO Robert Thomson publicly criticized AI companies for their unauthorized use of copyrighted content, arguing it undermines creators and America's intellectual property advantage. News Corp is actively pursuing both litigation, exemplified by its lawsuit against Perplexity AI, and strategic partnerships, such as its deal with OpenAI, to protect its content assets and ensure fair compensation from AI developers.

Analysis

News Corp's CEO, Robert Thomson, has publicly intensified the conflict between media publishers and AI developers, framing the use of copyrighted material for training AI models as intellectual property theft. This defensive and litigious posture is coupled with a pragmatic commercial strategy, demonstrated by News Corp's lawsuit against Perplexity AI on one hand, and its multiyear content licensing partnership with OpenAI on the other. This dual approach of 'wooing and suing' aims to establish a new, significant revenue stream by compelling AI firms to pay for the content they consume. Thomson's argument is that companies investing tens of billions in data centers and chips can afford to spend tens of millions on content, which he deems crucial for their success. The backdrop of better-than-expected quarterly earnings for News Corp lends credibility to management's assertive strategy. However, this creates a tangible headwind for AI-centric technology giants like Meta, Google, and Amazon, which face growing legal and regulatory uncertainty. While Meta recently won a lawsuit, the judge noted the case did not establish a final legal precedent, leaving the risk of future litigation and increased operational costs for content acquisition as a key concern for the sector.

Key Decisions for Investors

• Investors in News Corp (NWS, NWSA) should view the company's aggressive intellectual property strategy as a potential long-term value driver, with the OpenAI deal serving as a blueprint for future high-margin licensing revenue.
• Holders of stock in major AI developers like Meta (META), Alphabet (GOOGL), and Amazon (AMZN) must monitor the escalating legal challenges from content owners, as potential licensing fees or litigation settlements represent a new and material cost factor that could impact future margins.
• The ongoing conflict over AI training data is a defining theme for the media and tech sectors, and portfolio managers should assess their exposure to both content owners, who stand to benefit from monetization, and AI firms, which face rising input costs.