As the World Churns

Fractionally Legal 64 Looks at a Somewhat Artificial Confluence of Events

This should be a moment of ebullience. America turns 250. New York is hosting the World Cup. The Knicks, statistically, are on their way to their first championship in half a century. By any measure, we should be celebrating.

But that is only half true. Something like the 250th anniversary is a unique opportunity to tie the great leader to our great American past, wrap himself in the flag, and make history. If I know anything about fascists, they can put on a good show. But what are we getting? A demonstration of hypermasculinity on the White House lawn and a few really stale Trump rallies. Triumph of the Will? More like “Triumph of the Shills.” Contrast that with the spontaneous street celebrations erupting around the Knicks and you can see immediately where the actual energy is. This is an outsider era. The institutions are hollow; but the city is alive.

I turn 49 this weekend. Born in 1977, a year after the bicentennial, into a post-Vietnam and Watergate malaise that saw America searching for an identity. We landed on Jimmy Carter: the mild-mannered peanut farmer who pledged a return to civility and humility. My parents voted for him twice, and absolutely hated Ronald Reagan, who turned out to be a far more transformative figure and one who gave us the deregulated and greed-dominated culture we have today. That was that.

But I’m turning 49 in an America that is again searching. At the moment we landed on a would-be billionaire (now a real one, based on his incessant grift) who speaks bombastically of American greatness but does pretty much nothing but enrich himself and his friends. This is not the last turn, and perhaps we will have a reaction that returns us to civility or something more akin to the collective responsibility that Reagan repudiated. Anything could happen. And that is what I am proud of about America: resilience, tenacity, and reinvention. It’s how I try to live my life, and why I will always be proud to be an American even when things look a little down.

I think the action around AI, the technology du jour, is a very American story. It demonstrates, better than almost anything else right now, how irrelevant our institutions are at this particular moment, and how much opportunity that irrelevance creates for everyone else. The same churn that produced Carter and then Reagan, that swung from the New Deal to deregulation and (possibly) back again, is playing out in real time across every industry AI touches. Nothing is settled. Everything is up for grabs. That is not a reason for anxiety. For people who are paying attention and doing the work, it is a reason for optimism.

The Trump administration’s June 2, 2026 AI executive order almost certainly had AI assistance in its drafting, and it shows. It establishes voluntary frameworks, 30-day agency deadlines, and a “covered frontier models” pre-deployment review process that the industry can essentially opt out of. Big words. Little action and it’s mostly irrelevant. There is some activity at the state level, as I’ve written about before, and some halfhearted efforts at federal legislation that have almost no chance of passing anytime soon.

The executive and legislative branches are on the sideline, and real AI law is being made in courtrooms, in real time, through commercial disputes. A very American way to make policy.

Since training data is the lifeblood of a large language model, the fights over what you can train your AI on are shaping the industry. In February 2025, a federal judge in Delaware issued the first ruling on whether using copyrighted material to train an AI constitutes fair use. The answer was no. In Thomson Reuters Enterprise Centre GmbH v. Ross Intelligence, the court found that Ross infringed Westlaw’s headnotes and that no fair use defense applied: the use was commercial, non-transformative, and harmed the market for the original. Ross has appealed; this is round one, not the final word. There are tons of other people who own content also fighting with AI companies over “fair use.” Their theory is that AI companies need to license their archives to train on. They probably do. But AI can now generate plausible analysis, serviceable journalism, and competent prose from scratch, without training on any particular proprietary source. So one has to ask: are the legacy content owners winning the battle (getting the right to block the LLMs from ingesting their content) while losing the war? Can they really do anything except slow the process down, license at the margins, and eventually become something closer to nonprofit public-good entities? But the audience relationship becomes the asset rather than the content (which is commodified anyhow), and there are real opportunities in that model. I see it in the legal profession, explained below.

The technology has moved on beyond the copyright issues. The new frontier is not what AI is trained on. It is what AI can do on your behalf. I’ve written before about agentic AI: software that doesn’t just answer questions but takes actions, in the real world, on your instructions. Booking a reservation. Filing a form. Shopping for you. The Ninth Circuit heard oral arguments in Amazon v. Perplexity, and the case is the best possible illustration of where this is heading. It’s really fascinating and an example of that dynamism and churn that is so American.

The facts: Perplexity’s Comet browser agent logs into a user’s Amazon account, shops on their behalf, and completes purchases. Amazon sued under the Computer Fraud and Abuse Act (CFAA), a 1986 anti-hacking statute, arguing the access is unauthorized even when the user explicitly directed it. A district judge agreed and entered a preliminary injunction in March 2026; the Ninth Circuit stayed it pending appeal.

Perplexity’s counsel put it plainly: Amazon is stretching criminal hacking statutes simply because it wants its customers to access the site Amazon’s preferred way. The litigation frames this as an unauthorized access question. It is actually an advertising question. When Comet shops for a user, it bypasses sponsored products and goes straight to what the user asked for. Amazon generated over $68 billion in advertising revenue in 2025. Perplexity is not hacking Amazon. It is eating Amazon’s ad revenue.

Here is the more interesting frame: the future is AI talking to AI. Amazon’s advertisers should, in principle, be able to speak directly to Perplexity’s AI to make a match, and it would probably be a better and more targeted match than the current spray-and-pray model. An AI agent that knows exactly what you want is more valuable to an advertiser than a distracted human scrolling past a sponsored listing. This is a business model transition, not a computer crime. There is a commercial arrangement to be made here, and, as happens very often, the litigation is the negotiation.

There is so much AI-generated legal work crossing my desk now that I routinely use my own AI to read it. Recently, I received a nine-page document retention letter from opposing counsel on a minor slip-and-fall matter. Nine pages. AI-generated. It is just one example of how AI is commodifying the arithmetic of legal practice. Anyone with a decent prompt can produce a nine page letter, mainly filled with nonsense. And my AI can answer it with 10 pages of nonsense. AI talking to AI, as with Amazon and Preplexity, is probably the solution here. And it will come.

So we’re increasingly coming to a place where the value is not in the AI. It is in building a book of business. That has always been true. If anything, AI sharpens it, because the commodity work is now essentially free (or annoying) and what remains is the judgment, the relationship, and the trust.

Bringing it all back home, this is what American dynamism actually looks like up close. Not a parade. Not a rally (although it would be nice if someone could competently organize one). A country and an industry reinventing themselves in real time, creating problems and opportunities in equal measure, with no one in charge and no script - a lot like those Knick watches parties and street celebrations. I turn 49 this weekend. The best is yet to come for me, and America.

Keep thinking, keep building,

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at YFGC.AI and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here, and follow me on LinkedIn here.