Tech stocks surged in 2023 around AI excitement, but copyright lawsuits could pose a risk as the New York Times (NYT) sues Microsoft (MSFT) and OpenAI over infringement related to using its news articles to train their large language models.

Yahoo Finance Tech Editor Daniel Howley reports on the changing landscape for AI development, particularly in response to or in preparation for future legal challenges.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

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- 2023 will always be known as the year of the great AI boom. Investment and excitement around AI pushing tech stocks higher to end the year. And companies like NVIDIA saw extraordinary gains. But now investors are turning attention to the risks that AI may pose. And last week we saw a big one, with the New York Times suing OpenAI and Microsoft over copyright infringement. Several other groups also sued AI companies in 2023. So the question now is, is copyright law the biggest risk to generative AI in the new year? For more on this, we turn to Yahoo Finance's own Dan Howley. Hey, Dan.

DANIEL HOWLEY: That's right. We're looking at the ongoing changing landscape when it comes to generative AI. And as you said, Rachelle, part of this now has to come down to copyright. Basically, just as a general background, these AI systems are trained on millions and millions of data points. Those can include news articles, or different posts online, and it's just generally the internet that these are usually trained on, especially the public ones.

And so what you end up with is questions of, are copyrighted articles, books, things along those lines, being used to train these systems? And so far we've seen several lawsuits come out, as you noted the most recent being the New York Times against OpenAI and Microsoft. The question is whether or not those copyright materials were used on the training. And so we've seen some pushback on these kinds of questions.

There's been some cases where people who are filing suits have been told by the court you have to be more specific about whether there are actually your products in these platforms. That has to do on the side of things with art itself. Whether you're a painter, or artist, things along those lines. If those visual generative AI platforms have used your art on the written side of things, there's questions as to whether or not the material continues to exist, or if it's any different than, say, a search engine bringing up information about your own article and then showing it there.