Anthropic Settles Allegations of Book Piracy, Agrees to Pay $1.5 Billion

AI startup Anthropic has agreed to pay a $1.5 billion settlement after being accused of copyright violations and piracy by well-known authors Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson.

The authors sued the company over what their lawyer calls "brazen infringement," alleging that Anthropic downloaded known pirated versions of their works, made copies of them, and fed those pirated copies into its models to train them.

"Anthropic is arguing, 'no, this was a transformative work under copyright law.' And transformative just means that the final product is completely different, that it's not infringing on your original work. But then the authors argue, 'but it was our work that created it,'" says Nouvelle Gonzalo, who specializes in corporate law, covering intellectual property and copyright.

The judge ultimately sided with Anthropic on the copyright issue, finding the company’s usage counted as “fair use” and was therefore legal. However, he also ruled that downloading them from a shadow library online constituted piracy.

“This landmark settlement far surpasses any other known copyright recovery,” said Justin Nelson, an attorney for the plaintiffs. "It is the first of its kind in the AI era. It will provide meaningful compensation for each class work and sets a precedent requiring AI companies to pay copyright owners. This settlement sends a powerful message to AI companies and creators alike that taking copyrighted works from these pirate websites is wrong."

Under U.S. copyright law, damages start at $750 per infringed work, meaning Anthropic could have faced more than a trillion dollars in penalties.

"A lot of people want to make new law just for AI, but the old laws work," said JD Harriman, partner at Foundation Law Group. "And they work in this case. This is just standard copyright violation of unlawful copying or buying pirated material."

"In June, the District Court issued a landmark ruling on AI development and copyright law, finding that Anthropic's approach to training AI models constitutes fair use," said Aparna Sridhar, Deputy General Counsel for Anthropic. "Today's settlement, if approved, will resolve the plaintiffs' remaining legacy claims. We remain committed to developing safe AI systems that help people and organizations extend their capabilities, advance scientific discovery, and solve complex problems."