AI upstart Anthropic has agreed to create a $1.5 billion fund it will use to compensate authors whose works it used to train its models without seeking or securing permission.
News of the settlement emerged late last week in a filing [PDF] in the case filed by three authors – Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson – who claimed that Anthropic illegally used their works.
We’re going to see a lot more of this. AI companies wIll create ‘slush funds’
Anthropic admitted to having bought millions of physical books and then digitizing them. The company also downloaded millions of pirated books from the notorious Library Genesis and Pirate Library Mirror troves of stolen material.
The company nonetheless won part of the case, on grounds that scanning books is fair use and using them to create “transformative works” – the output of an LLM that doesn’t necessarily include excerpts from the books – was also OK. But the decision also found Anthropic broke the law by knowingly ingesting pirated books.
Plaintiffs intended to pursue court action over those pirated works, but the filing details a proposed settlement under which Anthropic will create a $1.5 billion fund which values each pirated book it used for training at $3,000. Anthropic also agreed to destroy the pirated works.
In the filing, counsel observes that this is the largest ever copyright recovery claim to succeed in the USA and suggest it “will set a precedent of AI companies paying for their use of alleged pirated websites.”
This settlement is indeed significant given that several other major AI companies – among them Perplexity AI and OpenAI – face similar suits. It may also set a precedent that matters in Anthropic’s dispute with Reddit over having scraped the forum site’s content to feed into its training corpus.
The filing asks the court to approve the settlement, a request judges rarely overrule.
“We’re going to see a lot more of this,” according to Daryl Plummer, a distinguished VP analyst at Gartner.
Plummer predicted the AI industry will have to build “slush funds” to handle copyright and other legal claims.
“Death by AI claims will rise one thousand percent,” he told The Register, suggesting that as people turn to AI for advice and counsel, sometimes with disastrous outcomes, their loved ones will seek recompense.
Anthropic appears not to have commented on the settlement. For what it’s worth, it can cover the cost of the settlement with some of the $13 billion in funding it announced last week. ®
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