Two of Japan’s most influential newspapers, Nikkei Inc. and The Asahi Shimbun Co., filed a major lawsuit against Perplexity AI Inc., a San Francisco–based artificial intelligence start-up. The publishers accuse the company of systematic copyright infringement and demand both an injunction and 2.2 billion yen (S$19 million) each in damages. They submitted the suit to the Tokyo District Court on August 26, 2025, and issued a strong statement condemning Perplexity’s practices.
This case highlights a growing conflict: traditional news outlets want to protect their intellectual property and revenue streams, while AI companies push ahead with technologies that rely on vast amounts of content to train and operate their systems. The dispute underscores a key question of the digital age: Who owns and profits from information in an AI-driven world?
Publishers Fight Back Against “Freeloading”
Nikkei and Asahi released a joint declaration that framed the lawsuit not just as a corporate matter, but as a defense of journalism itself. The statement warned:
“These actions amount to continuous and large-scale freeloading on journalists’ time and effort. If left unchecked, this could undermine all media outlets trying to accurately report the facts and ultimately shake the very foundations of democracy.”
By choosing such sharp language, both newspapers aimed to present the dispute as a clash of values, not just economics. They argue that AI platforms profit from journalism while depriving publishers of rightful revenue, weakening their ability to invest in independent reporting. The lawsuit also seeks to protect the integrity of information, since Perplexity allegedly inserted errors into articles while attributing them to Nikkei and Asahi, thereby damaging their reputations.
The Allegations Against Perplexity
According to the plaintiffs, Perplexity engaged in multiple forms of misconduct:
- Copying and storing content without authorization since at least June 2024.
- Bypassing digital coding that marked certain material as off-limits for scraping or reproduction.
- Generating search results with errors that it falsely credited to Nikkei and Asahi, misrepresenting their journalism.
These accusations suggest deliberate overreach rather than incidental technical issues. The publishers believe Perplexity not only exploited their reporting but also weakened the credibility of their brands.
Perplexity, which reached a staggering US$18 billion valuation during its last fundraising round, positioned itself as a major player in the new wave of AI search and conversational tools. That valuation now hangs under a legal cloud as lawsuits pile up in multiple jurisdictions.
A Global Legal Battlefield
The lawsuit in Tokyo joins a wider wave of legal challenges facing AI developers around the world. In the United States, Forbes, Dow Jones (a News Corp subsidiary), and several other outlets already accused Perplexity of misusing their reporting. In Japan, The Yomiuri Shimbun, the country’s largest daily by circulation, also raised objections against the start-up.
Beyond Perplexity, global courts increasingly deal with disputes between publishers and AI companies:
- The New York Times vs. OpenAI and Microsoft in the U.S.
- Getty Images vs. Stability AI in the U.K.
- European Union lawsuits and investigations exploring how copyright law applies to generative AI.
The outcomes of these cases will likely set precedents that shape how AI companies can access, process, and monetize content.
Why Publishers Feel Cornered
The financial pressure on news organizations explains their aggressive legal stance. Advertising revenue keeps shrinking as readers migrate to digital platforms. Paywalls and subscriptions help, but they cannot fully replace the steady ad income newspapers once enjoyed.
AI tools complicate the equation. When users query platforms like Perplexity, they receive summarized answers instead of visiting original sources. That behavior siphons traffic away from publishers, cutting both ad impressions and subscription conversions. The newspapers argue that AI firms essentially monetize journalism without paying for it, similar to piracy in earlier digital eras.
For Nikkei, which runs Japan’s premier financial daily and owns the Financial Times in the U.K., the stakes run especially high. Its reputation relies on exclusive, accurate reporting for professionals. For Asahi, known for its progressive stance and investigative work, the fight ties directly to its identity as a guardian of democracy and free speech.
Perplexity’s Risky Strategy
Perplexity positioned itself as a direct competitor to Google’s search business and OpenAI’s ChatGPT. Its platform emphasizes answer-first AI search, giving users quick, natural-language responses to queries. To build such a service, the company depends on large volumes of high-quality content.
If the allegations hold true, Perplexity deliberately ignored publisher restrictions to strengthen its results. That decision may have accelerated growth, but it now exposes the company to billion-dollar liabilities and reputational damage.
Investors valued Perplexity at US$18 billion, making it one of the most prominent AI start-ups of this era. But lawsuits from Nikkei, Asahi, Forbes, and Dow Jones put both its technology model and financial future in jeopardy. A courtroom defeat could force Perplexity to pay hefty settlements or overhaul its business strategy.
Democracy, Information, and Trust
Nikkei and Asahi deliberately framed their lawsuit as more than a financial dispute. By describing AI’s use of journalism as a threat to democracy, they tapped into a deeper societal concern: the integrity of information.
If AI platforms freely republish articles with errors, the public may struggle to distinguish truth from distortion. For democracies, where informed citizens form the bedrock of political stability, that risk carries enormous weight. The newspapers want to highlight the potential erosion of fact-based debate when powerful AI systems spread distorted or unauthorized versions of news.
Courts as Referees in the AI Era
The courtroom battles in Tokyo, New York, London, and Brussels will determine how copyright applies to AI. Judges must balance innovation and public benefit with property rights and fair compensation.
Several outcomes remain possible:
- Licensing regimes where AI firms pay publishers for access, similar to how music streaming services compensate record labels.
- Technical restrictions that prevent AI tools from scraping certain sites.
- Fair use defenses that AI companies deploy to argue that summarization differs from direct reproduction.
- Settlements where publishers accept lump-sum payments in exchange for dropping lawsuits.
Whichever path prevails will set standards that ripple across industries far beyond journalism, including entertainment, academia, and software development.
What Comes Next
The Tokyo District Court will now evaluate the claims of Nikkei and Asahi. If the court grants an injunction, Perplexity may need to halt operations in Japan or redesign its product to comply with restrictions. The damages—2.2 billion yen per publisher—amount to nearly US$30 million combined, a significant but not fatal blow to a start-up of Perplexity’s size.
The reputational impact, however, may prove far more damaging. AI companies rely on trust from users, regulators, and investors. Allegations of systematic theft and misrepresentation could erode that trust, making it harder for Perplexity to expand globally.
At the same time, the lawsuit could encourage other publishers to file similar cases, creating a wave of litigation that forces AI companies into broad licensing agreements.
Conclusion
The lawsuit filed by Nikkei and Asahi against Perplexity AI represents a watershed moment in the relationship between traditional media and artificial intelligence. It combines financial stakes, legal precedent, and democratic values into a single confrontation.
The newspapers argue that Perplexity built a business on “freeloading” journalism, damaging both their revenue and their reputations. Perplexity defends an ambitious AI model that aims to transform how people access information. Courts now hold the power to decide which vision prevails.
This case will not only shape Perplexity’s future but also establish how society balances the rights of creators with the demands of an AI-driven information economy. The outcome in Tokyo could echo far beyond Japan, influencing how publishers and AI companies negotiate power, profit, and responsibility in the years ahead.
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