Anthropic to pay $1.5 billion to settle lawsuit over pirated chatbot training material

NEW YORK (AP) — Artificial intelligence company Anthropic has agreed to pay $1.5 billion to settle a class-action lawsuit by book authors who say the company took pirated copies of their works to train its chatbot.

The landmark settlement, if approved by a judge as soon as Monday, could mark a turning point in legal battles between AI companies and the writers, visual artists and other creative professionals who accuse them of copyright infringement.

The company has agreed to pay authors about $3,000 for each of an estimated 500,000 books covered by the settlement.

“As best as we can tell, it’s the largest copyright recovery ever,” said Justin Nelson, a lawyer for the authors. “It is the first of its kind in the AI era.”

A trio of authors — thriller novelist Andrea Bartz and nonfiction writers Charles Graeber and Kirk Wallace Johnson — sued last year and now represent a broader group of writers and publishers whose books Anthropic downloaded to train its chatbot Claude.

A federal judge dealt the case a mixed ruling in June, finding that training AI chatbots on copyrighted books wasn’t illegal but that Anthropic wrongfully acquired millions of books through pirate websites.

If Anthropic had not settled, experts say losing the case after a scheduled December trial could have cost the San Francisco-based company even more money.

“We were looking at a strong possibility of multiple billions of dollars, enough to potentially cripple or even put Anthropic out of business,” said William Long, a legal analyst for Wolters Kluwer.