InvestReports disagree4 publishers2 min readPublished Updated
A single Times call-spread buyer risks $407,000 on an October copyright ruling
Unsealed internal comments from Microsoft and OpenAI executives speak to the substitution question that fair use turns on. The visible market response is one options trade worth about $407,000 in premium, expiring in October.
The Investor · Invest desk
What happened
- Statements from Microsoft and OpenAI executives were unsealed on Friday in the New York Times copyright case being heard in a Lower Manhattan courthouse, and they go at the fair-use defense.
- The Washington Post reported that Microsoft's director of applied science, Brent Hecht, described the training as "the largest theft of labor in human history".
- CNBC reports that OpenAI is alleged to have copied millions of copyrighted articles for training, possibly exploiting hacks to retrieve them.
- The Financial Times reported that OpenAI co-founder Greg Brockman wrote in 2017 that he was "deeply motivated by the gazillions" he hoped to earn commercializing the technology.
- New York Times shares are flat year to date and barely moved on the Friday the unsealed statements landed.
Why it matters
- contradiction Since September 1 the same judge has had a Justice Department statement of interest asking the court to hold training on copyrighted work to be fair use on national security grounds, so the ugliest email in discovery can coexist with a defense win.
- decision CNBC's contributor argues the findings raise the odds of either a massive settlement and licensing deal or a trial loss catastrophic for the defendants. Buying a licence becomes the cheaper of those two.
- constraint The October expiration means the position needs a summary judgment ruling or a settlement within weeks, and a slow docket costs the buyer the entire debit.
- exposure The Times and other news organizations chose which internal comments to put on the record, so OpenAI and Microsoft are now arguing in public against their own employees' words, with the rest of discovery still in the plaintiffs' hands.
Fair use here turns on whether the accused product is a substitute for, or a direct competitor to, the source work [2]. The unsealed material goes at that element. CNBC, citing the Wall Street Journal, reports that an OpenAI executive acknowledged the chatbots were an "existential threat" to journalism, delivering the information directly and sparing the reader the click-through [3]. CNBC also reports that the companies' own data showed the Times' click-through rates dropping precipitously [20]. Of everything unsealed, the click-through decline is what speaks to the substitution test [2][20].
Roughly 4,400 October 72.5/77.5 call spreads at a $0.925 debit is about $407,000 of premium [9][13]. The five dollars between the strikes leaves $4.075 a share at best, or about $1.79m across 440,000 shares, which is 4.4 times the outlay [14][15]. CNBC puts that debit at 1.3% of Friday's close, and the $77.73 average analyst target about 10% above it; both work back to a close near $71 [10][16]. The upper strike sits 23 cents under that target [17].
So the position pays in full when the stock reaches the price analysts already have on it, and nothing above. A buyer who expected a licensing settlement to re-rate the business would not cap there. The same session showed October 62.5 and 65 puts trading, just below the August lows, which CNBC takes as the buyer selling downside to trim the cost further [23].
The CNBC contributor who flagged the flow prefers an in-the-money version, a 65/77.5 spread with more than $7 of upside against just over $5 of downside [11]. That structure buys the same view mostly with intrinsic value, so very little capital rides on whether October premium is expensive. The disclosure on the piece says Tidal owns or holds all the securities mentioned [12].
In my view the unsealed comments move settlement leverage more than they move a judge, since the doctrinal question in front of the court is not a question about tone. Two outcomes would show that wrong. If the court rules for the Times on substitution, the price of training on news stops being hypothetical for every model that does it. If it rules for the defendants on the doctrine, the tone of the emails stops mattering and the $407,000 expires at zero [13].
What to watch
- Rebuttals from Microsoft or OpenAI placing the quoted internal emails in context.
- Further unsealed exhibits from the other news organizations suing, and whether they are stronger than Friday's.
- Any build in Times calls dated past October, a sign someone is pricing a slower docket.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence62
- Adoption
- Insufficient
- Hype gap+35
- Incentives72
- Confidence60
Perspective Coverage
4 publishers- Builder
- Builder 23%
- Operator
- Operator 40%
- Investor
- Investor 37%
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
On Friday, newly unsealed statements from Microsoft and OpenAI executives threatened the fair-use defense in the New York Times lawsuit, which is being heard in a Lower Manhattan courthouse.
- [2]
The fair-use defense rests on showing that the accused product is neither a substitute for nor a direct competitor to the source work.
- [3]
According to the unsealed material, an OpenAI executive allegedly acknowledged their chatbots were an "existential threat" to journalism, delivering the information directly and sparing the reader the click-through.
ReportedSupportedSource: CNBC, citing the Wall Street Journal3 sources— create a free account to open themView cited source - [4]
Brockman allegedly replied "ah nice" when told an employee had found a hack around the Times' paywall.
ReportedSupportedSource: CNBC, citing the Financial Times3 sources— create a free account to open themView cited source - [5]
New court filings from The New York Times and other news organizations have put OpenAI and Microsoft's internal comments on AI and journalism at the center of a widening copyright dispute in the US.
- [6]
OpenAI allegedly copied millions of copyrighted articles for training, possibly exploiting hacks to retrieve them.
- [7]
On September 1 the Department of Justice filed a statement of interest asking the court to hold that training AI models on copyrighted work is fair use, citing national security: if foreign adversaries will train on anything they can access by any means, restricting U.S. systems risks ceding an insurmountable lead.
- [8]
New York Times shares have been flat year-to-date and barely moved on Friday.
- [9]
The meat of the options flow was a purchase of roughly 4,400 October 72.5/77.5 call spreads for a $0.925 debit.
- [10]
CNBC described the trade as risking just 1.3% of Friday's close to win at least 4.6% by October expiration, and potentially 10% or more on a move to the $77.73 average analyst target.
- [11]
A 65/77.5 call spread offers more than $7 of upside against just over $5 of downside, with a de minimis outlay of extrinsic premium.
- [12]
Disclosure on the CNBC piece: Tidal owns or holds all the securities mentioned in the article.
- [13]
The roughly 4,400 October 72.5/77.5 call spreads bought at $0.925 cost about $407,000 in premium.
- [14]
The spread's maximum value is $4.075 a share, about $1.79m across 440,000 shares.
- [15]
The maximum gain is about 4.4 times the debit paid.
- [16]
Both of CNBC's percentages imply a Friday close near $71.
- [17]
The 77.5 upper strike is 23 cents below the $77.73 average analyst target.
- [18]
Microsoft's own director of applied science, Brent Hecht, reportedly described the training as "the largest theft of labor in human history".
ReportedContestedSource: CNBC, citing the Washington Post3 sources— create a free account to open themView cited source - [19]
The findings meaningfully raise the odds of either a massive settlement and licensing deal or, failing that, a Times victory at trial that would be catastrophic for the defendants and enormously remunerative for the plaintiff.
ReportedContestedSource: CNBC Pro contributor3 sources— create a free account to open themView cited source - [20]
The companies' own data showed the Times' click-through rates dropping precipitously.
- [21]
The October expiration implies an expectation that a summary judgment ruling, or a settlement, could potentially land within weeks.
- [22]
OpenAI co-founder Greg Brockman reportedly wrote in 2017 that he was "deeply motivated by the gazillions" he hoped to earn commercializing the technology.
- [23]
Concurrent volume in the October 62.5 and 65 puts suggests the trader may have trimmed the outlay further by selling downside puts, just below the August lows.
Sources
4 independent publishers whose own reporting we read for this story.
- cnbc.comHistoric lawsuit sparks flurry of option activity in NY Times stock
1 article · September 21, 2026
- decrypt.coMicrosoft Staff Asked If AI Scraping Was 'Largest Theft of Labor in Human History'
1 article · September 18, 2026
- digitimes.comOpenAI, Microsoft filings intensify copyright fight over AI training
1 article · September 19, 2026
- livemint.comOpenAI, Microsoft executives quotes on AI training threaten copyright defense, news outlets argue | Mint
1 article · September 17, 2026
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