A legal test that Google’s lawyer told the Supreme Court was roughly “96% correct” could drastically undermine the liability shield that the company and other tech platforms have relied on for decades, according to several experts who advocate for upholding the law to the highest degree.
The so-called “Henderson test” would significantly weaken the power of Section 230 of the Communications Decency Act, several experts said in conversations and briefings following oral arguments in the case Gonzalez v. Google. Some of those who criticized Google’s concession even work for groups backed by the company.
Section 230 is the statute that protects tech platforms’ ability to host material from users — like social media posts, uploaded video and audio files, and comments — without being held legally liable for their content. It also allows platforms to moderate their services and remove posts they consider objectionable.
The law is central to the question that will be decided by the Supreme Court in the Gonzalez case, which asks whether platforms like Google’s YouTube can be held responsible for algorithmicaly recommending user posts that seem to endorse or promote terrorism.
In arguments on Tuesday, the justices seemed hesitant to issue a ruling that would overhaul Section 230.
But even if they avoid commenting on that law, they could still issue caveats that change the way it’s enforced, or clear a path for changing the law in the future.
What is the Henderson test?
One way the Supreme Court could undercut Section 230 is by endorsing the Henderson test, some advocates believe. Ironically, Google’s own lawyers may have given the court more confidence to endorse this test, if it chooses to do so.
The Henderson test came about from a November ruling by the Fourth Circuit appeals court in Henderson v. The Source for Public Data. The plaintiffs in that case sued a group of companies that collect public information about individuals, like criminal records, voting records and driving information, then put in a database that they sell to third parties. The plaintiffs alleged that the companies violated the Fair Credit Reporting Act by failing to maintain accurate information, and by providing inaccurate information to a potential employer.
A lower court ruled that Section 230 barred the claims, but the appeals court overturned that decision.
The appeals court wrote that for Section 230 protection to apply, “we require that liability attach to the defendant on account of some improper content within their publication.”
In this case, it wasn’t the content itself that was at fault, but how the company chose to present it.
The court also ruled Public Data was responsible for the content because it decided how to present it, even though the information was pulled from other sources. The court said it’s plausible that some of the information Public Data sent to one of the plaintiff’s potential employers was “inaccurate because it omitted or summarized information in a way that made it misleading.” In other words, once Public Data made changes to the information it pulled, it became an information content provider.
Should the Supreme Court endorse the Henderson ruling, it would effectively “moot Section 230,” said Jess Miers, legal advocacy counsel for Chamber of Progress, a center-left industry group that counts Google among its backers. Miers said this is because Section 230’s primary advantage is to help quickly dismiss cases against platforms that center on user posts.
“It’s a really dangerous test because, again, it encourages plaintiffs to then just plead their claims in ways that say, well, we’re not talking about how improper the content is at issue,” Miers said. “We’re talking about the way in which the service put that content together or compiled that content.”
Eric Goldman, a professor at Santa Clara University School of Law, wrote on his blog that Henderson would be a “disastrous ruling if adopted by SCOTUS.”
“It was shocking to me to see Google endorse a Henderson opinion, because it’s a dramatic narrowing of Section 230,” Goldman said at a virtual press conference hosted by Chamber of Progress after the arguments. “And to the extent that the Supreme Court takes that bait and says, ‘Henderson’s good to Google, it’s good to us,’ we will actually see a dramatic narrowing of Section 230 where plaintiffs will find lots of other opportunities to to bring cases that are based on third-party content. They’ll just say that they’re based on something other than the harm that was in the third party content itself.”
Google pointed to the parts of its brief in the Gonzalez case that discuss the Henderson test. In the brief, Google attempts to distinguish the actions of a search engine, social media site, or chat room that displays snippets of third-party information from those of a credit-reporting website, like those at issue in Henderson.
In the case of a chatroom, Google says, although the “operator supplies the organization and layout, the underlying posts are still third-party content,” meaning it would be covered by Section 230.
“By contrast, where a credit-reporting website fails to provide users with its own required statement of consumer rights, Section 230(c)(1) does not bar liability,” Google wrote. “Even if the website also publishes third-party content, the failure to summarize consumer rights and provide that information to customers is the website’s act alone.”
Google also said 230 would not apply to a website that “requires users to convey allegedly illegal preferences,” like those that would violate housing law. That’s because by “‘materially contributing to [the content’s] unlawfulness,’ the website makes that content its own and bears responsibility for it,” Google said, citing the 2008 Fair Housing Council of San Fernando Valley v. Roommates.com case.
Concerns over Google’s concession
Section 230 experts digesting the Supreme Court arguments were perplexed by Google’s lawyer’s decision to give such a full-throated endorsement of Henderson. In trying to make sense of it, several suggested it might have been a strategic decision to try to show the justices that Section 230 is not a boundless free pass for tech platforms.
But in doing so, many also felt Google went too far.
Cathy Gellis, who represented amici in a brief submitted in the case, said at the Chamber of Progress briefing that Google’s lawyer was likely looking to illustrate the line of where Section 230 does and does not apply, but “by endorsing it as broadly, it endorsed probably more than we bargained for, and certainly more than necessarily amici would have signed on for.”
Corbin Barthold, internet policy counsel at Google-backed TechFreedom, said in a separate press conference that the idea Google may have been trying to convey in supporting Henderson wasn’t necessarily bad on its own. He said they seemed to try to make the argument that even if you use a definition of publication like Henderson lays out, organizing information is inherent to what platforms do because “there’s no such thing as just like brute conveyance of information.”
But in making that argument, Barthold said, Google’s lawyer “kind of threw a hostage to fortune.”
“Because if the court then doesn’t buy the argument that Google made that there’s actually no distinction to be had here, it could go off in kind of a bad direction,” he added.
Miers speculated that Google might have seen the Henderson case as a relatively safe one to cite, given than it involves an alleged violation of the Fair Credit Reporting Act, rather than a question of a user’s social media post.
“Perhaps Google’s lawyers were looking for a way to show the court that there are limits to Section 230 immunity,” Miers said. “But I think in in doing so, that invites some pretty problematic reading readings into the Section 230 immunity test, which can have pretty irreparable results for future internet law litigation.”
Sam Altman, CEO of OpenAI, attends the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, on July 8, 2025.
David A. Grogan | CNBC
OpenAI on Monday announced it is taking an ownership stake in Thrive Holdings, a company that was launched by one of its major investors, Thrive Capital, in April.
The startup said it will embed engineering, research and product teams within Thrive Holdings’ companies to help accelerate their AI adoption and boost cost efficiency.
Thrive Holdings buys, owns and runs companies that it believes could benefit from technologies like artificial intelligence. It operates in sectors that are “core to the real economy,” starting with accounting and IT services, according to its website.
OpenAI, which is valued at $500 billion, did not disclose the financial terms of the agreement.
“We are excited to extend our partnership with OpenAI to embed their frontier models, products, and services into sectors we believe have tremendous potential to benefit from technological innovation and adoption,” Joshua Kushner, CEO and founder of Thrive Capital and Thrive Holdings, said in a statement.
It’s the latest example of OpenAI’s circular dealmaking.
The partnership is structured in a way that aligns the incentives of OpenAI and Thrive Holdings long term, according to a person familiar with the deal, who asked not to be named because the details are private.
If Thrive Holdings’ companies succeed, the size of OpenAI’s stake will grow.
It also acts as a way for OpenAI to get compensated for its services, according to another person familiar with the agreement who declined to be named because the details are confidential.
“This partnership with Thrive Holdings is about demonstrating what’s possible when frontier AI research and deployment are rapidly deployed across entire organizations to revolutionize how businesses work and engage with customers,” OpenAI COO Brad Lightcap said in a statement.
OpenAI also announced a collaboration with the consulting firm Accenture on Monday.
The startup said its business offering, ChatGPT Enterprise, will roll out to “tens of thousands” of Accenture employees.
Artificial intelligence startup Runway on Monday announced Gen 4.5, a new video model that outperforms similar models from Google and OpenAI in an independent benchmark.
Gen 4.5 allows users to generate high-definition videos based on written prompts that describe the motion and action they want. Runway said the model is good at understanding physics, human motion, camera movements and cause and effect.
The model holds the No. 1 spot on the Video Arena leaderboard, which is maintained by the independent AI benchmarking and analysis company Artificial Analysis. To determine the text-to-video model rankings, people compare two different model outputs and vote for their favorite without knowing which companies are behind them.
Google’s Veo 3 model holds second place on the leaderboard, and OpenAI’s Sora 2 Pro model is in seventh place.
“We managed to out-compete trillion-dollar companies with a team of 100 people,” Runway CEO Cristóbal Valenzuela told CNBC in an interview. “You can get to frontiers just by being extremely focused and diligent.”
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Runway was founded in 2018 and earned a spot on CNBC’s Disruptor 50 list this year. It conducts AI research and builds video and world models, which are models that are trained on video and observational data to better reflect how the physical world works.
The startup’s customers include media organizations, studios, brands, designers, creatives and students. Its valuation has swelled to $3.55 billion, according to PitchBook.
Valenzuela said Gen 4.5 was codenamed “David” in a nod to the biblical story of David and Goliath. The model was “an overnight success that took like seven years,” he said.
“It does feel like a very interesting moment in time where the era of efficiency and research is upon us,” Valenzuela said. “[We’re] excited to be able to make sure that AI is not monopolized by two or three companies.”
Gen 4.5 is rolling out gradually, but it will be available to all of Runway’s customers by the end of the week. Valenzuela said it’s the first of several major releases that the company has in store.
“It will be available through Runway’s platform, its application programming interface and through some of the company’s partners,” he said.
Nvidia on Monday announced it has purchased $2 billion of Synopsys‘ common stock as part of a strategic partnership to accelerate computing and artificial intelligence engineering solutions.
As part of the multiyear partnership, Nvidia will help Synopsys accelerate its portfolio of compute-intensive applications, advance agentic AI engineering, expand cloud access and develop joint go-to-market initiatives, according to a release. Nvidia said it purchased Synopsys’ stock at $414.79 per share.
“Our partnership with Synopsys harnesses the power of Nvidia accelerated computing and AI to reimagine engineering and design — empowering engineers to invent the extraordinary products that will shape our future,” Nvidia CEO Jensen Huang said in the release.
Synopsys stock climbed 3%. Nvidia shares rose slightly.
Tune in at 9:30 a.m. ET as Nvidia CEO Jensen Huang and Synopsys CEO Sassine Ghazi join CNBC TV to discuss the partnership. Watch in real time on CNBC+ or the CNBC Pro stream.
Nvidia has been one of the biggest beneficiaries of the AI boom because it makes the graphics processing units, or GPUs, that are key to building and training AI models and running large workloads.
Synopsys offers services including silicon design and electronic design automation that help its customers build AI-powered products.
“The complexity and cost of developing next-generation intelligent systems demands engineering solutions with a deeper integration of electronics and physics, accelerated by AI capabilities and compute,” Synopsys CEO Sassine Ghazi said in a statement.
The partnership is not exclusive, which means that Nvidia and Synopsys can still work with other companies in the ecosystem.
Both companies will hold a press conference to discuss the announcement at 10 a.m. ET.