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Newly unsealed court documents from the New York Times' copyright lawsuit against OpenAI and Microsoft reveal that both companies internally acknowledged their AI training practices could create a 'doom loop' harming the broader web ecosystem. Internal documentation reportedly described the scraping of copyrighted data to train models as the 'largest theft of labor in human history' and admitted the practice made a 'complete mockery of the idea of fair use.' Microsoft's Director of Applied Science, Brent Hecht, is quoted extensively in the filings expressing concern that AI-generated content could undermine the publishers and news organizations whose material trained the models. The revelations add significant weight to the Times' case and intensify scrutiny of how AI companies weighed known harms against commercial ambitions.