Alphabet Directors Face Shareholder Suit Over AI Training Policies

Amid an avalanche of AI infringement litigation, we know how rightsholders feel about tech giants’ alleged free-for-all training. But at least according to a new lawsuit filed against Google parent Alphabet’s directors, some investors are also far from thrilled about the practices – albeit because of the resulting billions in potential liability.

An Alphabet investor named Phil Rosen recently submitted that verified stockholder derivative complaint to an Illinois federal court, naming as defendants Alphabet’s board members and officers including CFO Anat Ashkenazi.

The multifaceted suit covers a variety of angles across nearly 80 detail-oriented pages. Despite this relative depth, however, the top-level claims are straightforward enough: “Alphabet and Google have engaged in copying millions of copyrighted sound recordings, musical compositions, and lyrics,” per the complaint.

“Google ingested, copied, processed, and commercially exploited these works without permission or compensation. These copies were used to build Lyria, Lyria 2, Lyria 3, Mulan, and MusicLM,” the action reads.

Meanwhile, Google is also accused of undermining Content ID’s “statement of position for the benefit of copyright holders by ingesting these copyrighted acts from YouTube without copyright holder consent.”

Unsurprisingly, in light of its length, the complaint doesn’t solely focus on the alleged training-related infringement of musical works and recordings.

But music is a key part of the filing, which recaps Udio’s founding history and the ongoing major-label infringement complaints against the platform. Furthermore, the suit cites plenty of different industry infringement cases targeting tech behemoths, among them Anthropic and Suno.

Getting down to the actual claims – breach of fiduciary duty, unjust enrichment, and Exchange Act violations – the board-director defendants allegedly “knowingly approved and/or permitted a business model to train Alphabet’s AI products on a dataset that included copyrighted materials, commercial voice models, and knew of the falsity of the misleading statements in SEC filings at the time they were made.”

Additionally, the three members of Alphabet’s audit committee allegedly “breached their fiduciary duties to the Company by permitting and facilitating Alphabet to conduct copyright and BIPA violations,” the suit states.

Finally, due to all the alleged conduct, “Alphabet will be subject to potentially massive liability from the copyright infringement,” according to the legal text, which even takes aim at the company’s share buybacks.

As the board “was directly responsible” for the transactions, it allegedly “caused Alphabet to repurchase its own common stock at prices that were artificially inflated by the materially false and misleading statements and omissions” in SEC filings.

Besides demanding restitution and more, the plaintiff is seeking an order compelling Alphabet and the director defendants “to take all necessary actions to reform and improve its corporate governance and internal procedures to comply with applicable laws and to protect Alphabet and its stockholders from a repeat of the damaging events described herein.”

DMN reached out to Google/Alphabet for comment but didn’t receive a response in time for publishing. In the bigger picture, it’ll be worth keeping an eye out for similar suits from here – especially because claims of this nature can seemingly apply to the directors of several different tech companies.