What the internal documents say
Documents and depositions unsealed in the New York Times' copyright lawsuit against Microsoft and OpenAI indicate that executives understood AI's destructive potential before shipping products built on it. An internal Microsoft document quoted by the newspaper's lawyers admits the company's AI content strategy "has started a 'doom loop' that will hurt the performance of our models and the entire web at the same time."
How the loop works
The document notes it is "highly unusual that an end-product threatens the economic foundations of its essential suppliers." AI products depend on fresh cultural content for training, yet they simultaneously destroy the livelihoods of the journalists, musicians and screenwriters who produce it.
- Tools like ChatGPT and Gemini summarize articles without sending readers to publishers, squeezing independent media revenue.
- According to the US Bureau of Labor Statistics, more than 200,000 jobs in "creative" industries have been lost over the past four years.
- AI-generated music is crowding out human-made tracks on streaming services.
- Hiring shows a similar loop: applicants use AI to polish resumes while recruiters drown in near-identical applications.
The open web and copyright fight
The filings also quote an internal Microsoft document admitting that millions of people will soon see large models "hoovering up" their work as an unprecedented theft. Meanwhile, the open web has already passed the point where AI-generated content outweighs human-written material.
Why it matters
The report shows AI companies saw this economic risk in their own internal assessments. For creators, publishers and platforms, it puts the copyright and revenue-sharing debate at the center of the industry's next phase.
