If I scrape the NYT content, and then commercialize a service that lets users query that content through an API (occasionally returning verbatim extracts) without any agreement from or payment to the NYT, that would be illegal.
It's not obvious to me why putting an LLM in the middle of the process changes that.
Tbh I’m mostly curious about whether this settles out of court or whether it goes through the system and sets a precedent.