Judge approves $1.5 billion copyright settlement between AI company Anthropic and authors

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SAN FRANCISCO (AP) — A federal judge on Thursday approved a $1.5 billion settlement between artificial intelligence company Anthropic and authors who allege nearly half a million books had been illegally pirated to train chatbots.

U.S. District Judge William Alsup issued the preliminary approval in San Francisco federal court Thursday after the two sides worked to address his concerns about the settlement, which will pay authors and publishers about $3,000 for each of the books covered by the agreement. It does not apply to future works.

“This is a fair settlement,” Alsup said, though he added that distributing it to all parties will be “complicated.” About 465,000 books are on the list of works pirated by Anthropic, according to Justin Nelson, an attorney for the authors.

“We have some of the best lawyers in America in this courtroom and if anyone can do it, you can," Alsup said.

The Association of American Publishers called the settlement a “major step in the right direction in holding AI developers accountable for reckless and unabashed infringement.”

“Anthropic is hardly a special case when it comes to infringement. Every other major AI developer has trained their models on the backs of authors and publishers, and many have sourced those works from the most notorious infringing sites in the world,” said Maria A. Pallante, president and CEO of the publisher group.

San Francisco-based Anthropic said it is pleased with the preliminary approval.

“The decision will allow us to focus on developing safe AI systems that help people and organizations extend their capabilities, advance scientific discovery, and solve complex problems. As we’ve consistently maintained, the court’s landmark June ruling that AI training constitutes transformative fair use remains intact. This settlement simply resolves narrow claims about how certain materials were obtained,” said Aparna Sridhar, deputy general counsel at Anthropic.

The Authors Guild, meanwhile, said the settlement “marks a milestone in authors’ fights against AI companies’ theft of their works. It sends a clear signal to AI companies that infringement of authors’ rights comes at a steep price and will undoubtedly push AI companies towards acquiring the books they want legally, through licensing.”

A Monday filing sought to convince the judge that the parties have set up a system designed to get out robust notice to all authors and publishers covered by the agreement, ensuring they get their cut of the pot if they want to sign off on the settlement or opt out to protect their legal rights moving forward.

They also tried to assure him that the author and publishers group that cobbled the deal together are not doing any “back room” dealings that would hurt lesser-known authors.

Alsup’s main concern centered on how the claims process will be handled in an effort to ensure everyone eligible knows about it so the authors don’t “get the shaft.” He had set a September 22 deadline for submitting a claims form for him to review before Thursday's hearing to review the settlement again.

The judge had raised worries about two big groups connected to the case — the Authors Guild and the Association of American Publishers — working “behind the scenes” in ways that could pressure some authors to accept the settlement without fully understanding it.

Attorneys for the authors said in Monday's filing they believe the settlement will result in a high claims rate, respects existing contracts and is “consistent with due process” and the court's guidance.

Alsup had 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 to help improve its Claude chatbot.

Bestselling thriller novelist Andrea Bartz, who sued Anthropic with two other authors last year, said in a court declaration ahead of the hearing that she strongly supports the settlement and will work to explain its significance to fellow writers.

“Together, authors and publishers are sending a message to AI companies: You are not above the law, and our intellectual property isn’t yours for the taking,” she wrote.

Alsup also said in the courtroom Thursday that he plans to step down from the bench by the end of the year. President Bill Clinton nominated him for the federal bench in 1999.

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AP Technology Writer Matt O'Brien contributed to this story from Providence, Rhode Island.