Report from Fox Business
In Brief – Sen. Josh Hawley (R-MO), one of Capitol Hill’s foremost Republican critics of large tech companies, chaired a hearing of the Senate Judiciary Committee on Crime and Counterterrorism and aggressively criticized Meta and other major AI developers for massive stealing and piracy of copyrighted works to train AI Large Language Models. Throughout the hearing Hawley referenced internal Meta messages regarding company deliberations, likely gathered through copyright lawsuits. The hearing followed two recent rulings in federal district courts that rejected claims by authors that AI developers Meta and Anthropic violated copyright law in their AI training. Judge Vince Chhabria dismissed a lawsuit against Meta, saying the authors failed to show that Meta’s AI harmed the market for their works, but noted this didn’t make Meta’s practices legal and he was highly critical of the plaintiffs’ legal arguments. In a separate case, Judge William Alsup ruled in favor of Anthropic, citing “fair use” in training its Claude AI model, due in large part to the highly transformative nature of their generative AI service.
Context – Why was a copyright and AI training hearing held in the Crime Subcommittee? Likely only Senator Hawley’s own subcommittee would hold the hearing he wanted. And while this one-sided show and his recent bill on AI and copyright won’t make a dent on the policy debate, the rulings on AI training and fair use by Judges Chhabria and Alsup are worth reading. Both recognize the transformative nature of Generative AI (GAI), but Chhabria creates a novel concept he calls “indirect market substitution” through which AI systems can harm copyright holders by creating massive volumes of cheap content that, while not copies, are “similar enough to compete with the originals and thereby indirectly substitute for them.” Divisions abound on the issue. Unlike Hawley, White House AI adviser David Sacks supports a broad fair-use approach and warns restrictive policies could set back US AI. In Europe, AI developers and major EU-based companies are calling for a delay in AI Act implementation with the copyright section of the EU General Purpose AI Code of Practice being especially contentious.