Artificial intelligence startup Anthropic has reached a $1.5 billion settlement with book authors who accused the company of taking pirated works to train its chatbot, Claude. If approved, the payout will be the largest copyright recovery ever reported in the US.
The lawsuit, filed last year by authors Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson, accused Anthropic of pulling vast quantities of copyrighted works from so-called “shadow libraries” like Library Genesis, Books3, and other pirate databases. Under the agreement, Anthropic will pay approximately $3,000 per book and destroy the data it obtained from shadow libraries.
“This settlement sends a powerful message to AI companies and creators alike that taking copyrighted works from these pirate websites is wrong,” said Justin Nelson, an attorney for the plaintiffs, in a statement to CNBC.
In June, US District Judge William Alsup issued a mixed ruling. He found that using copyrighted material to train AI models was “fair use.” However, the judge also determined that Anthropic’s method of acquiring the books — knowingly taking them from pirate sites — was illegal. This ruling set the stage for a high-stakes trial scheduled for December.
Facing potential damages that experts said could have reached billions and threatened the company’s future, Anthropic chose to settle.
Reactions from authors and industry
For writers, the agreement is being hailed as a victory. Mary Rasenberger, CEO of the Authors Guild, called it “an excellent result for authors, publishers, and rights holders generally, sending a strong message to the AI industry that there are serious consequences when they pirate authors’ works,” as quoted by The Associated Press.
Anthropic’s settlement could ripple through an industry already facing dozens of copyright lawsuits. Competitors like OpenAI, Midjourney, and Meta have also been accused of misusing creative works. Some firms have chosen to avoid legal battles by striking licensing deals with publishers and media groups.
In a statement, an Anthropic spokesperson said, “Today’s settlement, if approved, will resolve the plaintiffs’ remaining legacy claims. We remain committed to developing safe A.I. systems that help people and organizations extend their capabilities, advance scientific discovery and solve complex problems.”
The proposed settlement still requires approval from Judge Alsup. If confirmed, the deal will close one of the most closely watched copyright disputes in the AI era.
But Anthropic’s legal troubles aren’t over. The company continues to face claims from music publishers and the social media platform Reddit, both accusing it of using their copyrighted material without permission.
Anthropic, founded in 2021 by former OpenAI executives, has grown rapidly and was recently valued at $183 billion after raising $13 billion in funding. The company expects $5 billion in revenue this year, though it has yet to turn a profit.