Why this AI lawsuit matters to your business

Artificial intelligence is becoming part of everyday business operations, from drafting marketing copy and answering customer questions to summarising documents and preparing sales proposals. But a new legal dispute involving major news organisations, OpenAI and Microsoft shows that the question is no longer simply whether AI can help you work faster. You also need to ask where its output comes from, whether you have permission to use it and what evidence you can keep if someone challenges your business.

TechCrunch reported on September 5, 2026 that The Seattle Times and Newsday had sued OpenAI and Microsoft over the alleged use of journalism to train AI systems. The dispute is centred on how human-created content is collected, processed and reproduced by generative AI products.

For a Malaysian SME, this does not mean you should stop using AI. It means you should use it with clearer controls. A small company may not have an in-house legal department, but you can still create practical rules for staff, track the tools you use and require human review before publishing or sending important content.

What Happened

According to the source report, The Seattle Times and Newsday argued that the growth of generative AI could damage the journalism industry. Their lawsuit alleged that AI products consume human-authored content and produce copies or derivative versions while pursuing commercial objectives.

The lawsuit described generative AI as a “snake eating its own tail” and warned that the industry could be “broken beyond repair,” as quoted by TechCrunch. The concern is that if readers receive summaries or generated answers instead of visiting original publishers, the organisations that create journalism may lose visibility and support.

This is not the first major dispute of its kind. TechCrunch noted that The New York Times sued OpenAI and Microsoft in 2023 over alleged copyright infringement, followed by other publications. The Seattle Times case is also notable because Microsoft and OpenAI had funded some of the organisation’s journalism projects and fellowships, according to the report.

A Microsoft spokesperson told GeekWire, as cited by TechCrunch, that the company was surprised by the lawsuit but remained willing to discuss possible solutions. The allegations have not been finally decided by the court.

Why This Matters for Malaysian SMEs

You may not operate a newspaper, but your business also creates valuable content. That includes product photographs, training manuals, service descriptions, recipes, designs, customer testimonials, videos, software documentation and social media posts. If your team uploads these materials into an AI tool, you should understand how that tool handles prompts, files and outputs.

Consider a local café using AI to write bilingual promotional posts, a property agency preparing listing descriptions, a tuition centre generating lesson materials or a manufacturer summarising technical instructions. In each case, AI can assist with a first draft. However, blindly copying text or images from an AI tool can create risks if the output closely resembles another company’s work, contains inaccurate claims or uses material that your business does not have permission to publish.

Malaysia’s Personal Data Protection Act 2010 is relevant whenever your staff submit information that can identify individuals. Customer names, phone numbers, identification details, health information and private messages should not be pasted into an AI service without an approved process. The Personal Data Protection Commissioner provides guidance and information for organisations handling personal data.

Copyright is another practical concern. The Intellectual Property Corporation of Malaysia administers Malaysia’s intellectual property system, including copyright-related matters. You should not assume that a piece of AI-generated text, image, music or code is automatically safe simply because a tool produced it.

Simple controls you can introduce

Business area	Practical control
Marketing	Review AI drafts, verify claims and keep records of original photographs and campaign materials.
Customer service	Remove personal data before using AI for message summaries or suggested replies.
Human resources	Do not upload confidential employee records, medical details or disciplinary documents.
Operations	Use approved tools and record which employee created or reviewed each important document.
Software and design	Check licences, keep source files and require technical or creative review before release.

Build an AI content trail

A useful habit is to maintain a simple AI content register. It can be a spreadsheet showing the tool used, date, employee, purpose, source materials, reviewer and final approval. This is not complicated, but it gives you a clearer record if a customer, platform or rights holder questions your content.

Ask staff to save the original version of important work before AI editing begins. For example, retain the original product description, photograph, contract clause or design file. Record whether the AI tool only corrected grammar, generated a fresh draft or transformed third-party material. The more substantial the AI involvement, the more carefully a human should check the result.

Use AI as an assistant in your workflow, not as an invisible replacement for responsibility. Your business remains responsible for what it publishes, promises and sends.

The Bigger Picture

The dispute involving The Seattle Times and Newsday points to a larger change in how digital content is created and distributed. AI companies need large amounts of information to build and improve their systems, while publishers, creators and businesses want control over how their work is used. Courts, regulators and technology companies will continue shaping the rules, but your SME cannot wait for every issue to be settled before adopting sensible safeguards.

For Malaysian companies, the competitive advantage will come from combining automation with trusted original content. An AI tool may help produce a draft quickly, but your local knowledge, customer relationships, brand voice and product expertise are difficult to replace. A restaurant understands its halal processes and ingredients. A workshop knows its service conditions. A training provider understands its students. Make sure those human strengths remain visible in the final work.

You should also review the terms of each AI tool before allowing business use. Check whether uploaded information may be retained, whether business data is used for product improvement, how accounts are managed and whether the provider offers administrative controls. Keep sensitive work in approved systems, limit access by role and remove old data where appropriate.

A practical 30-day action plan

1. List your current AI use. Ask every department which tools they use and what information they submit.
2. Classify information. Mark customer data, employee records, trade secrets and confidential documents as restricted.
3. Create an approval rule. Require human review for public content, legal documents, financial communications and technical instructions.
4. Check sources. Ask staff to verify statistics, quotations, images, software code and claims before publication.
5. Keep records. Maintain prompts, drafts, source files and approval notes for important business materials.
6. Train your team. Explain that convenience does not remove copyright, privacy or accuracy responsibilities.

The key lesson from this developing lawsuit is not that AI is unusable. It is that businesses need to know how AI interacts with the content and data they depend on. By setting clear rules now, you can automate routine work while protecting your brand, your customers and the original material that makes your company different.

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