Trump just fired the US Copyright Office director after her report questioned AI training practices. President Trump fired U.S. Copyright Office Director Shira Perlmutter on Saturday, just one day after her office released a controversial report concluding AI companies' use of copyrighted materials may violate copyright law.

The timing raises questions:

• Perlmutter was terminated by email with no formal explanation provided

• Her firing came just two days after Trump also dismissed Librarian of Congress Carla Hayden, who had appointed Perlmutter in 2020

• The Copyright Office had released Part 3 of its landmark AI copyright study on Friday (May 9), which questioned the legal status of using copyrighted works to train AI models

The report's conclusion:

• The Copyright Office determined that "making commercial use of vast troves of copyrighted works to produce expressive content that competes with them in existing markets... goes beyond established fair use boundaries."

• This position challenges AI companies like OpenAI and xAI that rely heavily on copyrighted materials for training

• The report suggested licensing agreements between copyright holders and AI companies as the preferred path forward

Industry reactions:

• The American Federation of Musicians stated Perlmutter's firing "will gravely harm the entire copyright community"

• Music and publishing industries generally support the report's conclusions about licensing requirements

• AI companies face dozens of ongoing lawsuits from creators alleging copyright infringement

The stakes for frontier AI labs:

• If courts align with the Copyright Office's position, leading AI labs like OpenAI, Anthropic, and xAI could face significant cost increases for training data acquisition

• Mandatory licensing would force AI devs to negotiate with publishers, media companies, and creator groups, slowing development cycles

• Smaller AI startups with less capital could struggle to compete with established players who can afford licensing deals

• Open-source AI models might face existential challenges without access to diverse training materials

• The outcome could create a two-tier AI ecosystem: premium models trained on licensed content versus limited models trained on public domain materials

What's next:

It's unclear! Acting Librarian of Congress Robert Newlen notified staff of the changes but gave no timeline for appointing replacements.