AI giant Anthropic to pay $1.5 bn over pirated books

Anthropic, a prominent player in the AI sector, has agreed to pay at least $1.5 billion to resolve a class action lawsuit linked to the unauthorized use of copyrighted books in training its AI models. This settlement, revealed in court documents filed on Friday, underscores the serious implications for AI firms that utilize pirated content. Mary Rasenberger, CEO of the Authors Guild, expressed support for the settlement, stating, "This settlement sends a strong message to the AI industry that there are serious consequences when they pirate authors' works to train their AI, robbing those least able to afford it." The lawsuit was initiated by authors Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson, who claimed that Anthropic illegally copied their works to train Claude, its AI chatbot that competes with ChatGPT. In a notable ruling earlier this year, US District Court Judge William Alsup acknowledged that training AI models with books—regardless of their purchase status—transformed the works sufficiently to be considered "fair use." However, he denied Anthropic's request for comprehensive protection, stating that the practice of downloading millions of pirated books to create a permanent digital library was not defensible under fair use laws. The settlement agreement addresses around 500,000 books, offering approximately $3,000 per title, which is significantly higher than the minimum statutory damages specified by US copyright law. As part of the settlement, Anthropic is obligated to destroy all original pirated files along with any derivative copies, while retaining rights to legally purchased books. This settlement is pending judicial approval and comes amid increasing scrutiny and legal challenges facing AI companies regarding their training methodologies. Firms such as OpenAI and Meta are also embroiled in similar lawsuits, as rightsholders assert that scraping copyrighted materials without consent infringes on intellectual property rights. Founded in 2021 by former OpenAI executives and heavily supported by Amazon, Anthropic has rapidly ascended in the AI landscape. The company recently announced a successful funding round, raising $13 billion and achieving a valuation of $183 billion, which will be utilized to enhance its research on safety, expand operational capacity, and promote global outreach. As it competes with other major AI entities such as Google, OpenAI, Meta, and Microsoft, the arms race in generative AI is projected to draw hundreds of billions in investments over the coming years.