Anthropic's $1.5B piracy settlement with book authors is a record loss that hands AI labs their biggest legal win

Anthropic has to pay book authors $1.5 billion in a copyright settlement. A federal court in San Francisco approved the settlement after Anthropic downloaded books from the piracy databases LibGen and PiLiMi between 2021 and 2022. Of roughly 482,460 listed works, 91.3 percent were claimed, netting about $3,000 each, four times the statutory minimum. Anthropic must destroy the pirated files. Authors retain claims over AI outputs that reproduce original works and over Anthropic's future conduct. It's the largest copyright settlement in class action history.

But the payout covers piracy, not AI training itself. Judge Alsup had previously ruled that training AI on legally obtained books is "transformative - spectacularly so" and falls under fair use. Whether mass scraping of internet content without authors' consent counts as legal acquisition remains an open question, so the fair use debate is likely far from over. Still, the ruling looks like a milestone for AI labs that trained on web content without website owners' consent, their main source of training data.