The Seattle Times and Newsday sued OpenAI and Microsoft in federal court on Friday, accusing the technology companies of using their journalism without permission to train and operate artificial intelligence systems that can reproduce or closely mimic their reporting.

The lawsuit, filed in the U.S. District Court for the Southern District of New York, alleges that OpenAI and Microsoft scraped the newspapers’ websites, including material available only to paying subscribers, and incorporated their articles into datasets used to develop and operate products including ChatGPT, Microsoft Copilot and AI features within Bing.

The newspapers said the alleged use of their work goes beyond simply training AI models. They argued that the resulting products can reproduce passages from their articles, closely paraphrase their reporting and generate answers that give users information without requiring them to visit the publishers’ websites or purchase subscriptions.

That creates a potentially fundamental threat to the business model underpinning digital journalism, the newspapers said. Publishers spend heavily on reporters, editors, investigations and other newsgathering operations, while AI systems can potentially extract and redistribute the resulting information at scale.

“We feel strongly that we must defend our content – which we spend millions of dollars a year to produce – from being used without our consent or compensation,” Seattle Times President and CEO Alan Fisco wrote to employees, according to the newspaper.

An OpenAI spokesperson said the company’s models are trained on publicly available data and that their use of such material is protected by fair use. The spokesperson did not specifically comment on the lawsuit.

Microsoft, which is based near Seattle, said it was surprised by the legal action but acknowledged the importance of local journalism.

“While we’re surprised by the lawsuit, we appreciate the importance of local journalism and we’re always happy to sit down and explore solutions to this type of dispute,” a Microsoft spokesperson said in an email.

The newspapers are seeking an order requiring the companies to destroy copies of their copyrighted works as well as any training datasets or AI models that incorporate those works.

Such a remedy could have consequences well beyond the two publishers if the court ultimately finds that copyrighted news content was unlawfully incorporated into AI systems. Removing specific material from already trained models and datasets can be technically difficult, potentially turning a copyright dispute into a question about how AI companies should remediate models after they have been trained.

The case adds to a rapidly expanding legal confrontation between publishers and AI developers over who should control and benefit from the enormous amount of information used to build generative AI.

The New York Times filed a similar lawsuit against OpenAI and Microsoft in 2023, accusing the companies of using millions of its articles without authorization to develop AI systems. That case remains pending and has become one of the most closely watched copyright disputes in the technology industry.

Dozens of other copyright holders have also sued AI companies including OpenAI, Anthropic and Meta, alleging that their books, images, software, news articles and other creative works were used without permission to train AI models.

At the center of many of the cases is the question of whether training an AI model on copyrighted material constitutes a lawful use of that material, and whether AI-generated outputs that reproduce or closely substitute for original works create a separate copyright or economic harm.

The publishers’ argument is focused on that second issue. Even if courts ultimately permit some forms of data use for model training, publishers could argue that AI systems should not be allowed to reproduce substantial portions of their reporting or answer questions in ways that substitute for the original article.

That distinction could prove important for the future economics of online news. Search engines historically directed readers to publishers, creating a flow of traffic that could be monetized through advertising and subscriptions. AI assistants can instead provide synthesized answers directly, potentially reducing the incentive for users to click through to the source.

For local newspapers such as the Seattle Times and Newsday, the stakes have become high. Unlike large technology companies, publishers generally depend on subscription revenue, advertising, and audience engagement to finance expensive reporting operations. If AI systems capture the informational value of that reporting while reducing visits to the original publisher, the economic impact could extend beyond copyright royalties.

The lawsuit therefore puts pressure on OpenAI and Microsoft to address not only whether their use of news content is legally permissible, but also how AI companies should compensate publishers whose reporting contributes to the systems’ usefulness. The companies have already faced growing pressure to establish licensing arrangements and other commercial relationships with content owners. But litigation remains the more consequential route for publishers seeking to establish legal boundaries that could apply across the industry.

The outcome, adding to similar lawsuits, is expected to help determine whether the AI industry can continue relying broadly on internet content under existing copyright doctrines or whether developers will need permission, licensing agreements, or other compensation mechanisms to use professional journalism in building commercial AI systems.

For publishers, the issue has become about whether the economics of producing original information can survive when AI systems are capable of absorbing that information, repackaging it, and delivering it directly to consumers without sending those consumers back to the organizations that paid to produce it.

Beijing moves to strengthen financial-sector buffers as weak loan demand, low interest rates and pressure on insurers weigh on profitability

China’s finance ministry will lead a coordinated capital injection of about $54 billion into major state-owned insurers and banks, as Beijing moves to strengthen the financial system’s ability to absorb risks and support economic growth.

The measures, announced by the companies on Sunday, will channel fresh capital into some of China’s largest financial institutions at a time when prolonged low interest rates, weak credit demand and deteriorating profitability are putting pressure on lenders and insurers.

China Life Insurance (Group) Co, the country’s largest life insurer, said it would receive 35 billion yuan ($5.2 billion) from the Ministry of Finance, while China Taiping Insurance Group will receive 7 billion yuan.

People’s Insurance Company (Group) of China said separately that it plans to raise as much as 15 billion yuan through a private placement of A-shares to the finance ministry. The proceeds will be used to replenish the insurer’s capital base.

The government will also inject 10 billion yuan into China Export and Credit Insurance Corp to strengthen its core capital, while China Reinsurance (Group) said it would raise 3 billion yuan.

The measures are deemed necessary because Beijing has relied on large state-owned financial institutions to provide long-term funding to the economy and, more recently, to channel capital into financial markets. Stronger capital buffers give the insurers greater capacity to absorb investment losses, expand their balance sheets and potentially participate in government efforts to stabilize the stock market.

China’s insurers have faced particular pressure from the country’s prolonged low-interest-rate environment. Lower yields have reduced investment returns and squeezed profitability, while smaller and mid-sized insurers have seen their solvency positions come under increasing strain.

“The injection is an important step by the country to enhance the financial sector’s ability to serve the real economy and promote the high-quality development of the financial and insurance industries,” China Life said, adding that the additional capital would strengthen its ability to withstand risks.

China Taiping said the funds would improve its solvency and other key financial indicators.

The recapitalization also gives regulators greater room to manage stress elsewhere in the insurance industry. Well-capitalized state insurers can play a larger role in supporting weaker institutions or participating in industry consolidation if smaller insurers come under greater financial pressure.

Banks Receive $40 Billion-Plus Capital Boost

Three state-owned lenders separately announced plans on Sunday to receive a combined 290 billion yuan in fresh capital, extending Beijing’s broader recapitalization campaign for the banking sector.

Agricultural Bank of China said it plans to raise as much as 160 billion yuan through a private placement of A-shares to the Ministry of Finance, China National Tobacco Corp and its subsidiaries. Industrial and Commercial Bank of China, one of the world’s largest banks by assets, plans to raise up to 100 billion yuan through a similar private placement involving the finance ministry and China National Tobacco Corp and its subsidiaries.

Both banks said the proceeds would be used entirely to replenish core Tier 1 capital, the highest-quality form of bank capital and a key measure of a lender’s capacity to absorb losses.

The Export-Import Bank of China, one of the country’s three policy banks, will receive a separate 30 billion yuan injection from the finance ministry.

The banking recapitalization plan was first unveiled at China’s annual parliamentary meeting in March, extending a financing mechanism that Beijing used to strengthen several other major state-owned banks last year.

The additional capital should help the lenders maintain their capacity to extend credit as policymakers seek to stimulate an economy still constrained by weak domestic demand.

That challenge is weighing on China’s banks because businesses and households have remained cautious about borrowing, while sluggish property activity and subdued private-sector investment have limited demand for new loans. At the same time, intense competition for borrowers has put pressure on lending margins, eroding banks’ profitability.

The latest injections therefore serve two objectives: strengthening the banks’ ability to absorb losses and ensuring they retain sufficient balance-sheet capacity to support government efforts to revive growth.

Beijing Prioritizes Financial Stability

Together, the measures point to a broader shift in China’s economic policy: using the state balance sheet to reinforce the financial system before strains become more acute.

Higher core Tier 1 capital provides greater capacity for banks to expand lending without weakening capital ratios. For insurers, additional capital can improve solvency and allow them to maintain investment and insurance operations even as low yields challenge traditional business models.

Beijing has been asking state-owned financial institutions to play a greater role in supporting the economy and capital markets, increasing the importance of maintaining strong balance sheets across the sector.

The injections do not, however, resolve the underlying problems confronting Chinese financial institutions. Weak loan demand, narrow lending margins, subdued investment returns and risks linked to the property sector can continue to weigh on earnings even after banks and insurers receive additional capital.

The immediate effect is therefore likely to be greater financial resilience rather than a sudden improvement in profitability.

Economists believe the strategy offers a way to strengthen the transmission of monetary and fiscal support while reducing the risk that weaker financial institutions become a constraint on economic recovery. It also gives Beijing more flexibility to use state-owned lenders and insurers as policy tools during periods of market stress.

The scale of the programme is seen as an indication that authorities are preparing the financial system to withstand a prolonged period of slower credit growth and weaker returns, while ensuring that the country’s largest financial institutions remain capable of supporting the broader economy.

The U.S. Securities and Exchange Commission has sued Institutional Shareholder Services to compel the influential proxy adviser to provide information sought in a regulatory investigation, escalating the Trump administration’s effort to scrutinize companies that shape how investors vote their shares.

The SEC filed a subpoena-enforcement action Friday in the U.S. District Court for the Eastern District of Pennsylvania, alleging that ISS has failed to fully comply with an administrative subpoena seeking records related to its proxy voting recommendations and voting activity.

The regulator said its Division of Examinations began reviewing ISS in March and requested information concerning the firm’s recommendations and votes. After ISS failed to provide all of the requested material, the SEC’s enforcement division opened an inquiry and issued a subpoena on July 21.

According to the SEC, ISS continued to withhold certain records after the agency extended deadlines and made repeated attempts to resolve the dispute without litigation.

The SEC is asking the court to order ISS to comply with the outstanding demands. The agency stressed that its investigation remains at the fact-finding stage and that it has not determined that ISS violated federal securities laws.

ISS has challenged the SEC’s demands, arguing in correspondence with the agency that the subpoena raises First Amendment concerns. The company has also warned that producing information about its recommendations and clients’ voting activity could expose ISS and its clients to retaliation.

The dispute places one of the most influential players in the shareholder-voting ecosystem at the center of a consequential regulatory battle over the role and accountability of proxy advisers.

Proxy Advisers Under Washington Scrutiny

Proxy advisers provide institutional investors with research, analysis and voting recommendations on issues ranging from director elections and executive compensation to mergers, corporate governance and shareholder proposals. Their influence has grown alongside the expansion of institutional ownership, particularly among asset managers that must cast votes across thousands of publicly traded companies.

ISS and its principal rival, Glass Lewis, dominate the proxy-advisory industry. The White House has said the two firms together control more than 90% of the market. That concentration has made their recommendations a focus of policymakers who argue that proxy advisers can exert substantial influence over corporate governance without bearing the same responsibilities as the investors ultimately casting the votes.

President Donald Trump intensified the scrutiny in December by signing an executive order directing the SEC to review its rules and guidance governing proxy advisers. The order also directed the agency to enforce federal securities-law antifraud provisions and consider additional disclosure and regulatory requirements for the industry.

The administration’s approach marks a broader effort to increase transparency around the mechanisms through which institutional investors exercise shareholder rights.

First Amendment Issue Raises Stakes

The ISS dispute could have implications beyond the company’s compliance with a single subpoena because of the constitutional arguments it has raised, analysts have noted.

ISS’s position is that the SEC’s demands could implicate protected speech and expose the firm and its clients to retaliation based on their views and voting decisions.

The First Amendment argument introduces a competing regulatory principle. While the SEC has broad authority to investigate entities operating within the securities markets, companies subject to those investigations can challenge demands that they believe improperly burden protected expression or reveal sensitive information.

The court will therefore be asked initially to determine whether ISS must comply with the outstanding subpoena. The litigation does not itself establish that ISS engaged in misconduct or that the SEC’s underlying investigation has uncovered securities-law violations.

For the SEC, securing access to the requested records would allow investigators to examine more closely how ISS develops its recommendations and how those recommendations relate to actual shareholder voting. That scrutiny could become particularly important as regulators examine whether proxy advisers provide sufficiently transparent methodologies and whether investors understand the basis for recommendations that can influence votes at major public companies.

A Larger Fight Over Corporate Governance

The case comes at a time when shareholder voting has become an important battleground in corporate America. Large asset managers routinely vote on thousands of proposals each year, while activist investors and companies increasingly campaign for support ahead of contested director elections, compensation votes and strategic transactions.

Proxy advisers sit between those groups and can significantly shape the information investors receive before making voting decisions.

For the Trump administration, greater oversight of ISS and Glass Lewis could therefore become part of a broader effort to alter the balance of influence between corporate boards, activist shareholders, asset managers and proxy-advisory firms.

However, the case presents a different concern for ISS: that expanded regulatory demands could expose proprietary methodologies, confidential client information or voting activity while creating pressure on investors whose decisions may involve politically contentious corporate issues.

Although the immediate question before the court- whether ISS must turn over the information demanded by the SEC—begs for an answer, the larger issue is how much regulatory oversight should apply to firms whose recommendations can influence trillions of dollars in shareholder votes, and where regulators must draw the line between legitimate securities-law supervision and protected corporate and political expression.