AI company Anthropic agrees to pay $1.5B to settle lawsuit

Original Article By Daniel Arkin

Anthropic, a major artificial intelligence company, has agreed to pay at least $1.5 billion to settle a copyright infringement lawsuit filed by a group of authors who alleged the platform had illegally used pirated copies of their books to train large-language models, according to court documents.

“If approved, this landmark settlement will be the largest publicly reported copyright recovery in history, larger than any other copyright class action settlement or any individual copyright case litigated to final judgment,” said Justin Nelson, a lawyer for the authors.

The lawsuit, filed in federal court in California last year, centered on roughly 500,000 published works. The proposed settlement amounts to a gross recovery of $3,000 per work, Nelson said in a memorandum to the judge in the case.

“This result is nothing short of remarkable,” Nelson added.

In the lawsuit, the plaintiffs alleged that Anthrophic had “committed large-scale copyright infringement” by downloading and “commercially exploiting” books that it had allegedly gotten from pirating websites such as Library Genesis and Pirate Library Mirror.

Anthropic had argued that what it was doing fell under “fair use” under U.S. copyright law. In late June, the federal judge assigned to the case ruled that Anthropic’s actions constituted fair use because the end result was “exceedingly transformative.”

But that ruling from Judge William Alsup came with crucial asterisks. He declared that downloading pirated copies of books did not constitute fair use.

“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, the deputy general counsel of 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.” Sridhar added.

The lawsuit was originally filed by three writers: Andrea Bartz, Charles Graeber and Kirk Wallace Johnson. Bartz is a journalist and novelist; Graeber and Johnson are journalists who have published nonfiction books.

Bartz, Graeber and Johnson did not immediately respond to requests for comment.

The settlement could shape the trajectory of other pending litigation between AI platforms and published authors.

John Grisham, “Game of Thrones” author George R.R. Martin and Jodi Picoult are part of a group of nearly 20 bestselling authors who have sued OpenAI, alleging “systematic theft on a mass scale” for using their works to train ChatGPT and other tools.

Anthropic agreed to make four payments into the settlement fund, starting with a $300 million payout due within five business days of the court’s sign-off on the terms, according to Nelson.

Nelson’s memo to Alsup said the proposed $1.5 billion payout is the “minimum size” of the settlement. “If the Works List ultimately exceeds 500,000 works,” he said, “then Anthropic will pay an additional $3,000 per work that Anthropic adds to the Works List above 500,000 works.”

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