Around half a million writers will be eligible for a payday of at least $3,000 thanks to a historic $1.5 billion settlement in a class action lawsuit. A group of authors brought this lawsuit against Anthropic. This landmark settlement marks the largest payout in the history of U.S. copyright law, but this is not a victory for authors. It is yet another win for tech companies.
Tech giants are racing to amass as much written material as possible to train their LLMs, which power groundbreaking AI chat products like ChatGPT and Claude. These are the same products that are endangering the creative industries, even if their outputs are often unimpressive. These AIs become more sophisticated when they ingest more data, but after scraping basically the entire internet, these companies are literally running out of new information.
That is why Anthropic, the company behind Claude, pirated millions of books from shadow libraries and fed them into its AI. This particular lawsuit, Bartz v. Anthropic, is one of dozens filed against companies like Meta, Google, OpenAI, and Midjourney over the legality of training AI on copyrighted works.
Writers are not getting this settlement because their work was fed to an AI. This is just a costly slap on the wrist for Anthropic, a company that just raised another $13 billion, because it illegally downloaded books instead of buying them.
In June, federal judge William Alsup sided with Anthropic and ruled that it is indeed legal to train AI on copyrighted material. The judge argues that this use case is transformative enough to be protected by the fair use doctrine, a carve-out of copyright law that has not been updated since 1976. The judge said that like any reader aspiring to be a writer, Anthropic’s LLMs trained upon works not to replicate or supplant them but to create something different.
It was the piracy, not the AI training, that moved Judge Alsup to bring the case to trial. With Anthropic’s settlement, a trial is no longer necessary. A statement from Aparna Sridhar, deputy general counsel at Anthropic, said the settlement will resolve the plaintiffs’ remaining legacy claims and that the company remains committed to developing safe AI systems.
As dozens more cases over the relationship between AI and copyrighted works go to court, judges now have Bartz v. Anthropic to reference as a precedent. But given the ramifications of these decisions, another judge may arrive at a different conclusion.