Reddit Sues Perplexity for “Data Laundering”
4IR - Daily AI News
Welcome back to 4IR. Here’s today’s lineup:
Reddit sues Perplexity for “data laundering” after cease-and-desist increased scraping 40x - Reddit files lawsuit against Perplexity AI and three data-scraping firms for “industrial-scale” theft of user comments, alleging they bypass protections to resell content to AI companies
Meta and Reliance bet $97M that India wants AI in Hindi---and every other language - Mukesh Ambani and Mark Zuckerberg launch joint venture to bring Meta’s Llama models to Indian enterprises, with Reliance holding 70% and no regulatory approvals required
AI data center startup hits $10B valuation by turning wasted gas into compute power - Crusoe Energy raises $1.38 billion to build the physical backbone of AI on stranded energy sources, proving the real money isn’t in models---it’s in the electricity to run them
Reddit sues Perplexity for “data laundering” after cease-and-desist increased scraping 40x
The story: Reddit sued Perplexity AI and three data-scraping companies in New York federal court on October 22nd, accusing them of “industrial-scale” theft of user comments. The lawsuit names Perplexity plus three scraping firms---Lithuanian company Oxylabs, Texas-based SerpApi, and AWMProxy (which Reddit calls a “former Russian botnet”). The accusation: these scrapers bypass Reddit’s protections by harvesting content from Google search results, then sell it to AI companies. The twist? Reddit sent Perplexity a cease-and-desist letter, and Perplexity responded by increasing its use of Reddit data forty-fold. Perplexity posted on Reddit itself claiming it won’t be “extorted” and accused Reddit of trying to shake down Google.
What we know:
Filed October 22nd in U.S. District Court for Southern District of New York
Defendants: Perplexity AI, Oxylabs UAB, AWMProxy, and SerpApi
Reddit alleges “data laundering”---scrapers bypass protections, resell to AI firms
Reddit sent cease-and-desist; Perplexity then increased Reddit citations 40x
Reddit created test post only accessible via Google; Perplexity reproduced it within hours
Reddit calls user data “invaluable to AI companies” with 100M+ daily active users
Perplexity claims it only summarizes Reddit discussions with citations, doesn’t train on them
Why it matters: Reddit just exposed the dirty secret of AI training data: when you can’t scrape directly, you scrape Google’s cache of the site instead. It’s technically legal gray area dressed up as “public information.” But Reddit proved Perplexity is doing it by creating a test post only Google could access---and watching Perplexity spit it back out hours later. This isn’t about copyright. It’s about Reddit trying to force AI companies into paid licensing deals like they did with Google and OpenAI. The forty-fold increase after the cease-and-desist? That’s Perplexity calling Reddit’s bluff.
The “data laundering” framing is brilliant PR and possibly accurate. Scraping companies harvest Reddit via Google, selling the clean data to AI firms who can claim they bought from a third party, not Reddit directly. It’s like buying stolen goods from a fence instead of the thief. Reddit has licensing deals with Google and OpenAI worth millions, so watching Perplexity get the same data for free via SerpApi burns. Perplexity’s response---posting on Reddit to call it “extortion”---is either bold or stupid. The test post trick is damning evidence that cuts through Perplexity’s “we only summarize public discussions” defense. If it was truly public, why did you need to scrape Google’s index to find it?
Meta and Reliance bet $97M that India wants AI in Hindi---and every other language
The story: Meta and Reliance Industries formed Reliance Enterprise Intelligence Limited on October 24th with Rs 855 crore ($97.3M) to bring enterprise AI to India. Reliance owns 70%, Meta takes 30%, and no government approvals were needed. The joint venture will combine Meta’s Llama models with Reliance’s digital infrastructure to target IT, sales, finance, and customer service across Indian businesses. It’s Meta’s play for the world’s most populous market, and Reliance’s move to own the AI layer before Google or Microsoft lock it down.
What we know:
Initial investment of Rs 855 crore (~$97.3M) split 70% Reliance, 30% Meta
Will deploy Meta’s Llama models combined with Reliance’s enterprise reach
Targets sectors: IT, finance, sales, marketing, and customer service
Offers both cloud and hybrid AI solutions for Indian companies
No governmental or regulatory approvals required for incorporation
Formally announced October 25th after incorporation on October 24th
Why it matters: This is the battle for AI’s next billion users, except they’re all speaking languages Meta’s models barely understand. India has 22 official languages, hundreds of dialects, and 1.4 billion people who aren’t writing prompts in English. Reliance brings the local infrastructure and government connections. Meta brings the models that need massive retraining for non-English markets. The 70/30 split tells you who’s really in control---it’s Reliance’s market, Meta’s just licensing the tech.
The “no approvals needed” line is the most interesting part. India has been tightening digital regulations, but AI enterprise software slipped through because it’s business-to-business, not consumer-facing. The joint venture structure is smart too---if India eventually requires data localization or AI sovereignty rules, Reliance already owns the majority. Meta gets market access without the regulatory headaches.
AI data center startup hits $10B valuation by turning wasted gas into compute power
The story: Crusoe Energy Systems raised $1.38 billion in Series E funding at a $10 billion valuation on October 23rd, with Nvidia, Fidelity, and Mubadala Capital leading. The Denver-based company builds AI data centers powered by flared natural gas and renewable energy, achieving 45% lower energy costs than traditional cloud providers. Their 1.2-gigawatt Abilene, Texas campus built for OpenAI and Oracle went live just one year after construction started. With 45 gigawatts in the pipeline, Crusoe is betting that AI’s energy problem is their business opportunity.
What we know:
Raised $1.38B Series E at $10B valuation, co-led by Valor Equity Partners and Mubadala Capital
Investors include Nvidia, Fidelity, Founders Fund, and Salesforce Ventures
Operates 1.2GW Abilene campus for OpenAI/Oracle, plus 1.8GW Wyoming site under construction
Uses stranded natural gas, solar, wind, hydro, and geothermal---100% geothermal in Iceland facility
Reports 45 GW development pipeline (equivalent to “eight to ten New York Cities of power”)
Energy costs 45% lower than traditional hyperscalers by using stranded/flared gas
Why it matters: AI companies are hitting a wall, and it’s not compute---it’s electricity. Training runs need gigawatts, and the power grid can’t keep up. Crusoe solved this by building data centers where the energy already is: oil fields flaring natural gas, geothermal plants in Iceland, wind farms in Wyoming. The $10 billion valuation isn’t for software or models. It’s for turning wasted energy into the physical infrastructure AI desperately needs. The real winner in the AI race might not be who builds the best model, but who solves the power problem first.
Crusoe raised $1.38B in equity, but they also secured a $10B debt package backed by Oracle’s 15-year lease. AI companies are so desperate for compute capacity they’re signing decade-plus commitments before the buildings are finished. The “stranded energy” angle is clever marketing, but the real advantage is speed. Traditional data centers take 3-5 years to build. Crusoe does it in one because they’re not waiting for utility hookups or permitting.
Note: Commentary sections are editorial interpretation, not factual claims
Excellent analysys! The part about Perplexity increasing scraping 40x after the leter is just wild, what a brazen move.