Microsoft will pay legal damages on behalf of customers using its artificial intelligence (AI) products if they are sued for copyright infringement for the output generated by such systems, the company said on Thursday.

Microsoft will assume responsibility for the potential legal risks arising out of any claims raised by third parties so long as the company's customers use "the guardrails and content filters" built into its products, the company said. It offers functionality meant to reduce the likelihood that the AI returns infringing content.

With the proliferation of generative AI – computer programs capable of generating text, images, sounds, other data – users have raised concerns over the technology's ability to generate content without referencing it to its original authors.

Microsoft is stacking its growth on GenAI, building on its investment in ChatGPT-maker OpenAI, and has incorporated the technology in a wide array of its products, including cloud services, Search and enterprise productivity software.

The company's Copilot Copyright Commitment extends Microsoft's existing intellectual property indemnification coverage to copyright claims relating to the use of its AI-powered assistants called Copilots and Bing Chat Enterprise.

(Reporting by Yuvraj Malik in Bengaluru; Editing by Shailesh Kuber)