Reddit drags Perplexity in a new lawsuit, accusing it of building up a $20 billion company off stolen data

"The lawsuit, filed Wednesday in Manhattan federal court, said the companies illegally circumvented digital guardrails to obtain data used to train AI models. Perplexity's AI tools used Reddit comments to generate answers for users, even after the company agreed not to scrape Reddit's data, the lawsuit said. Reddit said it sent a cease-and-desist letter to Perplexity in May 2024 demanding it stop scraping Reddit data unless it made a deal with the social media company, as Google and OpenAI had done."

"Perplexity said it "was not using Reddit content to train any AI models and that it would respect Reddit's robots.txt," according to the lawsuit. Perplexity's citations to Reddit increased "forty-fold after Reddit told it to stop," the lawsuit added. "Rather than respect Reddit and its users' rights, what Perplexity has done in response is simply come up with increasingly devious schemes to circumvent Reddit's security systems and policies," the lawsuit says."

"According to the lawsuit, Perplexity appears to have used third-party data scrapers to circumvent Reddit's digital guardrails by taking Reddit's content through Google's search engine results. "In other words, Perplexity's business model is effectively to take Reddit's content from Google search results, feed them into a third party's LLM, and call it a new product," the lawsuit says. "While that business model has somehow translated into a $20 billion valuation, it has not resulted in a willingness to pay for what others (including Google) have.""

Reddit filed a federal lawsuit in Manhattan accusing Perplexity and other data miners of illegally circumventing digital guardrails to obtain Reddit content used to train AI models. Reddit alleges Perplexity continued using Reddit comments to generate answers after agreeing not to scrape Reddit data. Reddit sent a cease-and-desist to Perplexity in May 2024 demanding it stop scraping unless it struck a licensing deal like Google and OpenAI. Perplexity denied using Reddit content to train models and said it would respect robots.txt, but citations to Reddit reportedly rose forty-fold after the cease-and-desist. The complaint alleges use of third-party scrapers and Google search results to funnel Reddit content into third-party LLMs and accuses Perplexity of avoiding payment despite a roughly $20 billion valuation.

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