Anthropic faces $1T mother of all copyright lawsuits that could reshape AI training

A federal appeals court is being urged to block the largest copyright class action ever certified against an AI company, with Anthropic facing up to $1 trillion in potential damages from 7 million claimants over its AI training practices. Industry groups warn that the lawsuit could “financially ruin” the entire AI sector and force companies into massive settlements rather than allowing courts to resolve fundamental questions about AI training legality.

What you should know: Anthropic, a leading AI company, is challenging a district court’s certification of a class action involving up to 7 million book authors whose works were allegedly used to train the company’s AI models without permission.
• Each potential claimant could trigger damages of up to $150,000 under copyright law, creating exposure of “hundreds of billions of dollars” for Anthropic.
• The company argues it faces trial in just four months based on a class certification made at “warp speed” without proper analysis.
• District Judge William Alsup allegedly failed to conduct a “rigorous analysis” and instead relied on his “50 years” of experience when certifying the class.

Why this matters: The case could set a precedent that fundamentally changes how AI companies approach training data and investment in the sector.
• Industry groups argue that such massive potential liability creates “incredibly coercive settlement pressure” that prevents proper legal resolution of AI training questions.
• The Consumer Technology Association and Computer and Communications Industry Association warn the ruling threatens “America’s global technological competitiveness” in AI development.

The complexity problem: Legal experts and author advocacy groups argue that copyright class actions are ill-suited for cases involving millions of books due to ownership complications.
• Many works involve “orphan works” where identifying rightsholders is impossible, potentially requiring “hundreds of mini-trials to sort out these issues.”
• Publishers and authors often have conflicting interests regarding AI training, with legal owners (publishers) and beneficial owners (authors) potentially wanting different outcomes.
• The Google Books case demonstrated that proving ownership across vast numbers of books is “anything but straightforward,” requiring Google to spend $34.5 million just to set up a rights registry.

What they’re saying: Industry groups emphasize the broader implications beyond Anthropic’s case.
• “One district court’s errors should not be allowed to decide the fate of a transformational GenAI company like Anthropic or so heavily influence the future of the GenAI industry generally,” Anthropic argued in its petition.
• Author advocacy groups, including the Authors Alliance and Electronic Frontier Foundation, criticized the judge for making “almost no meaningful inquiry into who the actual members are likely to be.”

The big picture: The lawsuit represents a critical test case for how copyright law will be applied to AI training, with both sides arguing that the current approach prevents proper resolution of these fundamental legal questions.