By Madeline Batt
Publication Date: 2026-05-06 12:43:00
Madeline Batt is the Legal Fellow for Tech Justice Law.
The Tech Litigation Roundup spotlights notable lawsuits and court decisions across a variety of tech-and-law issues.
A new lawsuit brings the question of AI monetization into the courthouse. The class action Doe v. Perplexity targets generative AI company Perplexity, along with Meta and Google, alleging they disclosed transcripts of users’ conversations with chatbots for targeted advertising. The case highlights a burgeoning monetization strategy for the AI industry to solve generative AI’s profitability problem with a function the technology has proven especially adept at: collecting intimate information about users. Coming a few months after announcements from Meta and OpenAI that they would use data from AI products to target ads, this class action provides an important window into how this form of monetization will be challenged in the courts.
Even as generative AI has attracted massive investment from venture capitalists and resulted in multi-billion-dollar valuations for AI start-ups, AI companies continue to lack a profitable business model. Generative AI models are extremely expensive to build and operate, and most users do not pay to use AI products. Even those who pay for AI subscriptions are not paying enough to cover the immense costs. In combination with circular financing agreements and other warning signs, these dynamics are leading some experts to voice fears of an AI bubble. (Others think the…
