Largest copyright infringement case reaches a $1.5 billion settlement with Anthropic's involvement
In a historic move, AI company Anthropic has agreed to pay $1.5 billion to settle a copyright infringement lawsuit filed by a group of authors. The lawsuit, which was centred on approximately 500,000 published works, was filed in August 2024 and was decided in the US District Court for the Northern District of California.
The settlement, if approved, will be the largest publicly reported copyright recovery in history. Anthropic PBC has admitted to illegally using pirated copies of the authors' books to train its AI models, specifically the Claude AI. The company retained these pirated copies even after determining they would not be used for training.
The settlement resolves claims that Anthropic violated copyright law by downloading pirated books rather than purchasing legitimate copies. The case reflects broader tensions within the AI industry regarding content licensing and fair use.
The $3,000 per work formula established by the settlement provides a baseline for licensing negotiations across the AI sector. However, it's important to note that the settlement does not provide comprehensive protection for AI companies against future copyright claims. It only releases past claims and explicitly excludes claims based on AI model outputs.
The settlement structure includes four payments into the settlement fund. Anthropic has agreed to pay the full $1.5 billion within less than two years following final approval. The settlement also includes provisions for accelerated payments if Anthropic achieves certain business milestones, suggesting the company expects significant revenue growth.
The settlement comes after a split court ruling on June 23, 2025, that found fair use for AI training but rejected piracy defenses. The US Copyright Office released major guidance in May 2025 addressing when AI developers need permission to use copyrighted works.
Notably, Concord Music and other publishers reached a partial agreement with Anthropic regarding copyright protection measures in January 2025. Anthropic must destroy books downloaded from Library Genesis or Pirate Library Mirror and any copies originating from the torrented versions.
The settlement was filed on September 5, 2025, and was presided over by Senior US District Judge William Alsup. The settlement compares favorably to other copyright class action recoveries, and it could encourage AI companies to invest more heavily in legitimate content licensing, shifting the focus from pirated sources to legitimate content.
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