"Bankruptcy cannot become the new land grab for AI.”. Doug Kreuzkamp was shocked when news outlets reported that Google won an auction to buy a huge amount of operational data as part of Spirit Airlines’ bankruptcy proceedings.

What happened

Doug Kreuzkamp was shocked when news outlets reported that Google won an auction to buy a huge amount of operational data as part of Spirit Airlines’ bankruptcy proceedings. Kreuzkamp founded a startup called Springshot in 2011, which created a widely used proprietary platform that helps humans and AI systems improve airline efficiency and quickly solve logistics problems so flights can stay on time and airlines can operate as smoothly as possible.

Springshot powered Spirit’s technology stack for the last three years, right up to the “very last flight,” Kreuzkamp told Ars. Yet his company got no notice when Spirit prepared to auction off a massive dataset that he thinks likely improperly includes a substantial amount of data and intellectual property (IP) that Springshot owns—not Spirit.

In a limited objection filed last month, Springshot argued that Spirit’s sale agreement does not make it clear what data is being sold.

The important details

It only vaguely references categories of data that would possibly rope in Springshot data, including “productivity and collaboration data,” “core business systems and business application data,” and “workflow and process data.” “This expansive definition does nothing to differentiate between Springshot’s intellectual property that exists within Spirit’s data repositories and systems, but Spirit does not own, and Spirit data that it actually owns and has the capacity to sell,” Springshot argued. Springshot urged the court to pause Spirit’s data sale until a transparent forensic process establishes that none of the data Google is grabbing is actually owned by third parties.

If the bankruptcy court does not “pump the brakes,” it risks sanctioning an “unauthorized acquisition and use of trade secrets” that could doom startups, Springshot alleged. In an email to Ars, Springshot summarized its fears as the court possibly creating “a precedent where startups see massive amounts of IP transferred to the world’s richest and most monopolistic companies via bankruptcy courts.” “Bankruptcy cannot become the new land grab for AI,” Kreuzkamp told Ars.

“The possession of IP is not ownership.” Asked for comment, Google’s spokesperson declined to discuss mounting objections and repeated a prior statement provided to Ars that did not address any of the concerns raised.

Context and impact

“We acquired part of an enterprise dataset from Spirit Airlines, which can be helpful in improving our products and AI models,” Google’s spokesperson said. “We will not receive any personal information from this dataset.” It seems likely that a wide range of Spirit vendors could be in the same spot as Springshot, Kreuzkamp suspects, and his firm is not the only one complaining.

Citing Springshot’s concerns in a separate objection, the International Aero Engines LLC and the IAE International Aero Engines AG alleged that the dataset might also include its proprietary commercial information, technical data, and financial data. Both vendors cited confidentiality provisions in Spirit agreements that appear to have been completely ignored in the push to get the data sale approved.

Top concerns are that proprietary data could be transferred to Google without consent, giving firms no chance to guard against Google—or a third party later gaining access to the data—infringing ownership rights and exposing trade secrets.

What comes next

Both vendors said they risked irreparable harm through the sale to Google and then again through possible resales to future third parties. For Springshot, it also seems possible that Google could use its valuable IP to create a rival product.

In August, just a week before the controversial Spirit auction, Europe’s largest airline, Ryanair, announced a five-year partnership with Google. Under the deal, Ryanair will share operational data to improve Gemini Enterprise tools.

That “is precisely the function Springshot served for Spirit,” the startup said in a footnote in its objection, while alleging that “Springshot’s data may be among the most AI-relevant assets to be purchased.” As Springshot argued: “Should the sale proceed without such safeguards, and should Google obtain Springshot’s intellectual property and ingest that data, Springshot would forfeit the value of its technology it has spent 15 years developing.

Key signals

• Springshot powered Spirit’s technology stack for the last three years, right up to the “very last flight,” Kreuzkamp told Ars.
• Citing Springshot’s concerns in a separate objection, the International Aero Engines LLC and the IAE International Aero Engines AG alleged that the dataset might also include its proprietary commercial information, technical data, and financial data.
• In the past, it was straightforward to determine who owned an asset.

What to watch

The next signal is whether other platforms, publishers, agencies, or large buyers adopt the same posture.