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“First of its kind” AI settlement: Anthropic to pay authors $1.5 billion
Ars Technica: “Settlement shows AI companies can face consequences for pirated training data. Authors revealed today that Anthropic agreed to pay $1.5 billion and destroy all copies of the books the AI company pirated to train its artificial intelligence models. In a press release provided to Ars, the authors confirmed that the settlement is “believed to be the largest publicly reported recovery in the history of US copyright litigation.”
Covering 500,000 works that Anthropic pirated for AI training, if a court approves the settlement, each author will receive $3,000 per work that Anthropic stole. “Depending on the number of claims submitted, the final figure per work could be higher,” the press release noted. Anthropic has already agreed to the settlement terms, but a court must approve them before the settlement is finalized.
Preliminary approval may be granted this week, while the ultimate decision may be delayed until 2026, the press release noted. Justin Nelson, a lawyer representing the three authors who initially sued to spark the class action—Andrea Bartz, Kirk Wallace Johnson, and Charles Graeber—confirmed that if the “first of its kind” settlement “in the AI era” is approved, the payouts will “far” surpass “any other known copyright recovery.”
“It will provide meaningful compensation for each class work and sets a precedent requiring AI companies to pay copyright owners,” Nelson said. “This settlement sends a powerful message to AI companies and creators alike that taking copyrighted works from these pirate websites is wrong.”
Settlement Agreement (39 pages; PDF) (via CourtListener)
The New York Times: “In a landmark settlement, Anthropic, a leading artificial intelligence company, has agreed to pay $1.5 billion to a group of authors and publishers after a judge ruled it had illegally downloaded and stored millions of copyrighted books.
The settlement is the largest payout in the history of U.S. copyright cases. Anthropic will pay $3,000 per work to 500,000 authors. The agreement is a turning point in a continuing battle between A.I. companies and copyright holders that spans more than 40 lawsuits across the country. Experts say the agreement could pave the way for more tech companies to pay rights holders through court decisions and settlements or through licensing fees.
“This is massive,” said Chad Hummel, a trial lawyer with the law firm McKool Smith, who is not involved in the case. “This will cause generative A.I. companies to sit up and take notice.” The agreement is reminiscent of the early 2000s, when courts ruled that file-sharing services like Napster and Grokster infringed on rights holders by allowing copyrighted songs, movies and other material to be shared free on the internet.
“This is the A.I. industry’s Napster moment,” said Cecilia Ziniti, an intellectual-property lawyer who is now chief executive of the artificial intelligence start-up GC AI. The settlement came after a ruling in June by Judge William Alsup of the U.S. District Court for the Northern District of California.
In a summary judgment, the judge sided with Anthropic, maker of the online chatbot Claude, in significant ways. Most notably, he ruled that when Anthropic acquired copyrighted books legally, the law allowed the company to train A.I. technologies using the books because this transformed them into something new. “The training use was a fair use,” he wrote. “The technology at issue was among the most transformative many of us will see in our lifetimes.”
But he also found that Anthropic had illegally acquired millions of books through online libraries like Library Genesis and Pirate Library Mirror that many tech companies have used to supplement the huge amounts of digital text needed to train A.I. technologies. When Anthropic downloaded these libraries, the judge ruled, its executives knew they contained pirated books…”
