Price of answers: Perplexity AI and the content ecosystem dilemma

February 2026 was a testing time for Perplexity AI, Inc. as it prepared rebuttals to lawsuits from global media houses. The New York Times filed in the Southern District of New York, accusing Perplexity of taking paywalled content through retrieval-augmented generation and distributing millions of its articles unlawfully. Dow Jones alleged “massive illegal copying,” and the New York Post pointed to Perplexity’s own “Skip the Links” tagline as an invitation to obtain news without visiting the original publication. By February 27, 2026, the company was due to file a defence in one of six active or threatened publisher suits. Co-founder and CEO Aravind Srinivas had built Perplexity around a simple proposition: a direct, cited answer rather than a maze of links. By February 2026, the company had reached roughly $200 million in annual recurring revenue and a $21.21 billion valuation. Having discontinued advertising for a subscription-first model, its relationship with the content ecosystem that powered its answers was no longer a reputational question but its central commercial dependency. Srinivas faced three paths: negotiate bilateral licensing with the litigating publishers, as OpenAI had done with News Corp; contest the suits on fair use and press the Comet Plus revenue-share model as the industry standard or license selectively, settling the highest-exposure disputes while contesting the rest. The case asks students to resolve a live dilemma at the intersection of platform strategy, stakeholder management, and digital business model design.