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NEW YORK (AP) — Disney and Universal have filed a copyright lawsuit against popular artificial intelligence image-generator Midjourney on Wednesday, marking the first time major Hollywood companies have enter the legal battle over generative AI.

Filed in federal district court in Los Angeles, the complaint claims Midjourney pirated the libraries of the two Hollywood studios to generate and distribute “endless unauthorized copies” of their famed characters, such as Darth Vader from Star Wars and the Minions from Despicable Me.

“Midjourney is the quintessential copyright free-rider and a bottomless pit of plagiarism. Piracy is piracy, and whether an infringing image or video is made with AI or another technology does not make it any less infringing,” the companies state in the complaint.

The studios also claimed the San Francisco-based AI company ignored their requests to stop infringing on their copyrighted works and to take technological measures to halt such image generation.

Midjourney didn’t immediately respond to a request for comment Wednesday.

In a 2022 interview with The Associated Press, Midjourney CEO David Holz described his image-making service as “kind of like a search engine” pulling in a wide swath of images from across the internet. He compared copyright concerns about the technology with how such laws have adapted to human creativity.

“Can a person look at somebody else’s picture and learn from it and make a similar picture?” Holz said. “Obviously, it’s allowed for people and if it wasn’t, then it would destroy the whole professional art industry, probably the nonprofessional industry too. To the extent that AIs are learning like people, it’s sort of the same thing and if the images come out differently then it seems like it’s fine.”

The Recording Industry Association of America, which is engaged in its own legal battles against generative AI companies, came out in support of Disney and Universal’s lawsuit.

“This action by Disney and Universal represents a critical stand for human creativity and responsible innovation,” RIAA CEO Mitch Glazier said in a statement. But the music industry representative did point out that there are paths forward through partnerships that can advance both sectors.

Major AI developers don’t typically disclose their data sources but have argued that taking troves of publicly accessible online text, images and other media to train their AI systems is protected by the “fair use” doctrine of American copyright law.

The studio’ case joins a growing number of lawsuits filed against developers of AI platforms — such as OpenAI, Anthropic — in San Francisco and New York.

Meanwhile, the first major copyright trial of the generative AI industry is underway in London, pitting Getty Images against artificial intelligence company Stability AI.

NEW YORK (AP) — U.S. stocks are drifting just below their all-time high on Tuesday as the wait continues to hear what will come of trade talks underway between the United States and China.

The S&P 500 was 0.5% higher in late trading as talks between the world’s two largest economies carried into a second day. The Dow Jones Industrial Average was up 91 points, or 0.2%, with an hour remaining in trading, and the Nasdaq composite was 0.6% higher.

Stocks have roared higher since dropping roughly 20% below their record two months ago, when President Donald Trump shocked financial markets with his announcement of stiff, wide-ranging tariffs. Much of the rally was due to hopes that Trump would lower his tariffs after reaching trade deals with countries around the world, and the S&P 500 is back within 1.8% of its all-time high, which was set in February.

It’s getting to be time to see whether such hopes were warranted. The talks with China, which are likely covering a range of disagreements between the two countries, were “going well,” U.S. Commerce Secretary Howard Lutnick said as he arrived Tuesday morning. He expected them to continue all day in London.

Both the United States and China have put many of their tariffs announced against each other on pause as talks continue.

Even though many tariffs are on hold for the moment, they’re still affecting companies and their ability to make profits because of all the uncertainty they’ve created.

Designer Brands, the company behind the DSW shoe store chain, became the latest U.S. company to yank its financial forecasts for 2025 because of “uncertainty stemming primarily from global trade policies.”

The company, which also owns the Keds, Jessica Simpson and other shoe brands, reported a larger loss for the start of the year than analysts were expecting, and its revenue also fell short of forecasts. CEO Doug Howe pointed to ”persistent instability and pressure on consumer discretionary” spending, and the company’s stock tumbled 20.4%.

The uncertainty is moving in both directions, to be sure. A survey released Tuesday of optimism among small U.S. businesses improved a bit in May.

“While the economy will continue to stumble along until the major sources of uncertainty are resolved, owners reported more positive expectations on business conditions and sales growth,” according to Bill Dunkelberg, chief economist at the National Federation of Independent Business.

On Wall Street, J.M. Smucker fell 15.1% even though its results for the latest quarter topped analysts’ expectations. Its revenue fell short of expectations, as did its forecast for profit in the upcoming year.

Tesla helped to offset such losses after rising 5.1%. The electric vehicle company has been recovering since tumbling last week as Elon Musk’s relationship with Trump imploded. That raised fear about possible retaliation by the U.S. government against Tesla.

Shares that trade in the United States of chipmaking giant Taiwan Semiconductor Manufacturing Co. rose 2.7% after the company known as TSMC said its revenue in May jumped nearly 40% from the year earlier.

Casey’s General Stores leaped 11.5% after the chain of convenience stores based in Ankeny, Iowa, reported a stronger profit for the latest quarter than analysts expected. It credited strength in sales of hot sandwiches and other items.

In stock markets abroad, indexes were mixed amid mostly modest movements across Europe and Asia. A 0.8% drop for Germany’s DAX and a 0.6% gain for South Korea’s Kospi were a couple of the bigger moves.

In the bond market, the yield on the 10-year Treasury eased to 4.47% from 4.49% late Monday.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

WASHINGTON (AP) — Artificial intelligence is speeding up the work of America’s intelligence services, Director of National Intelligence Tulsi Gabbard said Tuesday.

Speaking to a technology conference, Gabbard said AI programs, when used responsibly, can save money and free up intelligence officers to focus on gathering and analyzing information. The sometimes slow pace of intelligence work frustrated her as a member of Congress, Gabbard said, and continues to be a challenge.

AI can run human resource programs, for instance, or scan sensitive documents ahead of potential declassification, Gabbard said. Her office has released tens of thousands of pages of material related to the assassinations of President John F. Kennedy and his brother, New York Sen. Robert F. Kennedy, on the orders of President Donald Trump.

Experts had predicted the process could take many months or even years, but AI accelerated the work by scanning the documents to see if they contained any material that should remain classified, Gabbard said during her remarks at the Amazon Web Services Summit in Washington.

“We have been able to do that through the use of AI tools far more quickly than what was done previously — which was to have humans go through and look at every single one of these pages,” Gabbard said.

The intelligence community already relies on many private-sector technologies, and Gabbard said she wants to expand that relationship instead of using federal resources to create expensive alternatives.

“How do we look at the available tools that exist — largely in the private sector — to make it so that our intelligence professionals, both collectors and analysts, are able to focus their time and energy on the things that only they can do," she said.

Gabbard, who coordinates the work of 18 intelligence agencies, has vowed to shake up America’s spy services.

Since assuming her role this year, she has created a new task force to consider changes to agency operations as well as greater declassification. She also has fired two veteran intelligence officers because of perceived opposition to Trump, eliminated diversity, equity and inclusion programs and relocated the staff who prepare the President’s Daily Brief to give her more direct control.