AI startup Anthropic agrees to pay $1.5bn to settle book piracy lawsuit

"The artificial intelligence company Anthropic has agreed to pay $1.5bn to settle a class-action lawsuit by book authors who say the company took pirated copies of their works to train its chatbot. The landmark settlement, if approved by a judge as soon as Monday, could mark a turning point in legal battles between AI companies and the writers, visual artists and other creative professionals who accuse them of copyright infringement."

"As best as we can tell, it's the largest copyright recovery ever, said Justin Nelson, a lawyer for the authors. It is the first of its kind in the AI era. ChatGPT offered bomb recipes and hacking tips during safety tests A trio of authors thriller novelist Andrea Bartz and nonfiction writers Charles Graeber and Kirk Wallace Johnson sued last year and now represent a broader group of writers and publishers whose books Anthropic downloaded to train its chatbot Claude."

"If Anthropic had not settled, experts say losing the case after a scheduled December trial could have cost the San Francisco-based company even more money. We were looking at a strong possibility of multiple billions of dollars, enough to potentially cripple or even put Anthropic out of business, said William Long, a legal analyst for Wolters Kluwer. US district judge William Alsup of San Francisco has scheduled a Monday hearing to review the settlement terms."

Anthropic agreed to pay $1.5bn to settle a class-action by authors alleging the company used pirated copies of their books to train its chatbot, offering roughly $3,000 per affected book for about 500,000 books. Plaintiffs say the payout is the largest copyright recovery in history and the first of its kind in the AI era. A June ruling found that training AI on copyrighted books is not illegal but that Anthropic wrongfully acquired millions of books from piracy websites. Legal analysts warned that a trial loss could have cost multiple billions and threatened the company’s survival. A judge will review the settlement at a scheduled hearing.

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