Giant AI company Anthropic will shell out a whopping $1.5 billion for stolen books scandal
In a significant turn of events, AI startup Anthropic, based in San Francisco, is facing a copyright infringement settlement worth millions. The lawsuit accuses the company of illegally copying books to train Claude, its AI chatbot.
Founded in 2021 by former OpenAI executives, Anthropic has grown rapidly since Claude's initial release in early 2023. The company, heavily backed by Amazon, recently raised an impressive US$13 billion in a funding round, valuing the startup at a staggering US$183 billion. However, this growth has been overshadowed by the ongoing legal battle.
The settlement, which is yet to receive judicial approval, exceeds any known previous settlements in such cases. It covers approximately 500,000 books, with each work valued at around US$3,000 - four times the minimum statutory damages under US copyright law.
The authors behind the lawsuit against Anthropic are Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson. They accused Anthropic of illegally downloading millions of books to train their AI systems.
The settlement requires Anthropic to destroy the original pirated files and any copies made, but it retains rights to books it legally purchased and scanned. This ruling stated that Anthropic's practice of downloading millions of pirated books to build a permanent digital library was not justified by fair use protections.
This is not an isolated incident. AI companies, including Anthropic, OpenAI, Meta, Google, and Microsoft, are facing growing legal pressure over their training practices. Multiple lawsuits against these companies remain pending.
In a statement, Mary Rasenberger, CEO of the Authors Guild, said that the settlement sends a strong message to the AI industry about the consequences of pirating authors' works.
Notably, US District Court Judge William Alsup ruled in June that Anthropic's training of its Claude AI models with books constituted "fair use" under the law, but rejected Anthropic's bid for blanket protection. The funds raised by Anthropic will be used to expand capacity, deepen safety research, and support international expansion.
The race for dominance in the generative AI sector is expected to attract hundreds of billions of dollars in investment over the next few years. Anthropic competes with generative AI offerings from Google, OpenAI, Meta, and Microsoft, making this settlement a significant hurdle in the company's path to success.
