Anthropic Reaches $1.5 Billion Settlement in Historic Copyright Lawsuit

Anthropic, a leading artificial intelligence company, has agreed to a $1.5 billion settlement in a class-action lawsuit filed by authors who alleged the unauthorized use of their copyrighted works to train the company's AI chatbot, Claude. This settlement, announced on September 5, 2025, is poised to become the largest copyright recovery in history and sets a significant precedent in the AI industry.

The lawsuit was initiated by authors Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson, who claimed that Anthropic downloaded approximately 7 million digitized books from unauthorized sources, including Books3, Library Genesis (LibGen), and Pirate Library Mirror, to train its AI models. The authors argued that this constituted a violation of their intellectual property rights.

In June 2025, U.S. District Judge William Alsup ruled that while the use of copyrighted books for AI training could be considered fair use, the method of acquiring these books through piracy violated copyright laws. The settlement, pending judicial approval, includes compensation of about $3,000 per book for approximately 500,000 works and mandates the destruction of the pirated files.

Justin Nelson, an attorney representing the plaintiffs, stated, "This settlement sends a powerful message to AI companies and creators alike that taking copyrighted works from these pirate websites is wrong." Anthropic, backed by major investors including Amazon and Alphabet, did not admit liability but agreed to the terms to resolve the claims.

The case has drawn attention to the legal and ethical challenges associated with using copyrighted materials in AI training. Mary Rasenberger, CEO of the Authors Guild, commented, "This is an excellent result for authors, publishers, and rightsholders generally, sending a strong message to the AI industry that there are serious consequences when they pirate authors’ works to train their AI."

As of September 9, 2025, Judge Alsup has delayed approval of the settlement, expressing dissatisfaction with the lack of details in the proposed agreement. He has ordered both parties to provide fuller information about the affected works and authors by September 15 and additional clarifications by September 22. Leaders from the Association of American Publishers and the Authors Guild have criticized the judge’s response, arguing that he misunderstood the publishing industry and underestimated the challenges a complex claims process would pose.

This settlement underscores the importance of adhering to copyright laws in the rapidly evolving field of artificial intelligence. It serves as a cautionary tale for AI companies about the potential legal repercussions of using unauthorized materials in training data and highlights the need for clear guidelines and ethical practices in AI development.