Anthropic Agrees to Pay $1.5 Billion to Settle Lawsuit With Book Authors

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 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 settlement sends a powerful message to A.I. companies and creators alike that taking copyrighted works from these pirate websites is wrong,” said Justin A. Nelson, a lawyer for the authors who brought the lawsuit against Anthropic.

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 for 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.