Anthropic's $1.5 billion copyright settlement wins final approval

Anthropic can finally start cutting checks to the authors and book publishers who sued the AI lab over copyright infringement. A federal judge gave final approval Monday to Anthropic’s $1.5 billion settlement of a class action copyright lawsuit, Reuters reported. Judge William Alsup of the U.S. District Court for the Northern District of California issued preliminary approval of the settlement last year, after ruling that Anthropic had illegally downloaded and stored millions of copyrighted books. Alsup has since retired, and Judge Araceli Martinez-Olguin signed off on the settlement on Monday.

The payout will deliver $3,000 per work across an estimated 500,000 works, shared among the authors and publishers who hold rights to them. The settlement is believed to be the largest in the history of U.S. copyright law, yet many authors and creators still don’t view it as a win. That is because of how the underlying legal question was resolved: Alsup sided with Anthropic on the core issue, ruling that training an AI model on copyrighted text counts as fair use — a decision widely seen as a turning point for the AI industry. The ruling didn’t excuse how Anthropic obtained the books in the first place, though. Anthropic had built its training library from two sources: books it purchased and scanned, which was fine, and books it downloaded from pirate sites like Library Genesis and Pirate Library Mirror. Alsup found the second method illegal on its own terms and said the piracy question could go to trial; Anthropic agreed to a settlement soon after to avoid a trial and whatever damages a jury might have awarded.

While the final approval closes out this case, it doesn’t settle the legal question industry-wide, because Alsup’s ruling was a single district court decision, and Anthropic’s decision to settle means the case will never reach an appeals court to become binding precedent. Other judges remain free to reach their own conclusions on their own facts — which is exactly what is playing out elsewhere. A string of copyright lawsuits is still pending against companies including Google, Meta, Midjourney, and OpenAI over whether it’s legal to train AI models on copyrighted works. Just last week, a group of publishers and authors — including Hachette, Cengage, Elsevier, author Scott Turow, and S.C.R.I.B.E. — filed a class action lawsuit against Google over accusations that the company used their copyrighted works to train its Gemini AI platform.

Why it matters

The fair-use ruling underlying this settlement gives AI companies a favorable, if non-binding, precedent for training on copyrighted text, even as the piracy question it sidestepped keeps surfacing in new lawsuits against other AI makers.