Reddit Hits Perplexity With “Data Theft” Suit as the AI Wild West Turns Into a Legal Shootout

“Boy, that escalated quickly...”

Another internet bar fight just broke out, and surprise, surprise, Reddit’s the one swinging a big ole lawsuit.

Reddit has officially sued AI startup Perplexity, accusing it of stealing user posts and passing them off as “training data” for its fancy AI search engine. In the lawsuit filed in New York federal court, Reddit claims Perplexity didn’t wander onto the site by accident… it allegedly hired a crew of data pirates to break in through the side door.

According to Reddit, that crew included Lithuanian data-scraper Oxylabs, Texas-based SerpApi, and a “former Russian botnet” named AWMProxy (of course Russia would have to be involved). The trio (allegedly) disguised themselves as normal Redditors to bypass protections, harvest billions of posts, and feed them to Perplexity’s AI.

(Source: AP News)

Perplexity, for its part, said the whole thing is “extortion” and accused Reddit of trying to shake down anyone who doesn’t pay for its new data-licensing hustle. Their defense is they don’t train AI models on Reddit content… they just summarize and cite it. Which, if true, is kind of like saying, “I didn’t steal your car, I just used it to drive to the grocery store.”

The lawsuit also claims that after Reddit sent a cease-and-desist letter, Perplexity responded by… increasing its Reddit citations forty-fold just out of spite.

Reddit’s Chief Legal Officer Ben Lee said AI companies are “locked in an arms race for quality human content,” and that pressure has ignited an “industrial-scale data laundering economy.” Translation: the bots need more of our conversations to sound less robotic… and they’re getting desperate.

But oh how the turntables… because as it turns out, Reddit’s not exactly innocent in this story. The company signed multimillion-dollar licensing deals with Google and OpenAI, which now make up nearly 10% of its revenue. And while those two paid up, Perplexity apparently told Reddit to pound sand.

The company then posted its response on Reddit itself (a move so hilarious it deserves an upvote), saying this is just a “show of force” by Reddit to strong-arm smaller AI players while getting in bed with big dogs like Google.

Now most counterarguments sound a lot like this: “Come on, Reddit’s posts are public… anyone can read them, so how is it theft?” And under normal circumstances, they’d have a point. But when Google and Sam Altman are both cutting multimillion-dollar checks just to sip from the same data well, Perplexity’s not gonna have much of a leg to stand on in court… other than the classic “I didn’t do it” excuse.

At the time of publishing this article, Stocks.News holds positions in Google as mentioned in the article.