AI company Anthropic agrees to eliminate data from pirated books used for training the AI chatbot Claude, and will pay a sum of $1.5 billion in a copyright infringement lawsuit.
In a significant development in the AI industry, San Francisco-based AI company Anthropic has agreed to pay a settlement of $1.5 billion to settle a class action lawsuit over allegations of using pirated books to train its AI models. The settlement, which requires judicial approval, surpasses any other known copyright recovery in this sector, according to plaintiffs' attorney Justin Nelson.
The lawsuit concerned Anthropic's AI chatbot Claude, which was accused of being trained with pirated books. The settlement covers approximately 500,000 books, translating to roughly $3,000 per work.
The settlement comes as a partial victory for Anthropic, as US District Court Judge William Alsup ruled in June that Anthropic's training of its Claude AI models with books, whether bought or pirated, constituted "fair use" under the law. However, Alsup rejected Anthropic's bid for blanket protection, ruling that the company's practice of downloading millions of pirated books to build a permanent digital library was not justified by fair use protections.
Under the agreement, Anthropic will destroy the original pirated files and any copies derived from them. The company retains rights to books it legally purchased and scanned.
Anthropic, known for its Claude chatbot and AI models, focuses on AI safety and responsible development. Founded in 2021 by former OpenAI executives, the startup was heavily backed by Amazon. The founders of Anthropic are siblings Dario Amodei and Daniela Amodei, with Dario Amodei serving as the CEO.
The race for generative AI 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. The settlement far surpasses Anthropic's annual revenue rate, which quintupled to US$5 billion since early this year.
Recently, Anthropic raised $13 billion in a funding round, valuing the AI startup at $183 billion. Multiple lawsuits against AI companies, including OpenAI, Meta, and others, remain pending. Rightsholders argue that scraping copyrighted content without permission violates intellectual property law.
The settlement between Anthropic and authors requires judicial approval. The lawsuit was filed by authors Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson, who accused Anthropic of illegally copying their books.
The settlement marks a milestone in the AI era, with Anthropic becoming the first company to face such a lawsuit. As the AI industry continues to evolve, it is expected that companies will need to navigate the complexities of intellectual property law to ensure they are operating within the bounds of the law.
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