Anthropic has reached a preliminary settlement in a high-profile copyright lawsuit brought by book authors, avoiding what could have been more than $1 trillion in damages that threatened the company’s survival. The settlement, expected to be finalized September 3, resolves a class action case where authors alleged Anthropic illegally used their works to train AI models by downloading them from “shadow libraries” like LibGen.
The big picture: While a California judge ruled in June that Anthropic’s use of the books constituted “fair use,” he found that the company’s method of acquiring works through piracy sites was illegal, leaving Anthropic vulnerable to massive statutory damages at trial.
The financial stakes: With approximately 7 million works in Anthropic’s training library and statutory damages starting at $750 per infringed work, the company faced potential penalties reaching billions or even exceeding $1 trillion.
• “It’s a stunning turn of events, given how Anthropic was fighting tooth and nail in two courts in this case,” says Edward Lee, a law professor at Santa Clara University.
• “But they had few defenses at trial, given how Judge Alsup ruled. So Anthropic was starting at the risk of statutory damages in ‘doomsday’ amounts.”
What you should know: The case began in 2024 when authors Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson sued Anthropic for allegedly using their copyrighted works without permission to train Claude, the company’s AI assistant.
• Judge William Alsup’s June ruling created a split decision—finding the AI training itself was legal fair use, but the acquisition method through piracy sites violated copyright law.
• The trial was scheduled to begin in December, with most affected authors just beginning to receive notice of their eligibility to participate in the class action.
Author reaction uncertainty: Many writers in the potential class weren’t involved in settlement negotiations, raising questions about acceptance of the terms.
• “The big question is whether there is a significant revolt from within the author class after the settlement terms are unveiled,” says James Grimmelmann, a professor of digital and internet law at Cornell University.
• “That will be a very important barometer of where copyright owner sentiment stands.”
Ongoing legal challenges: Anthropic still faces other major copyright disputes, including a lawsuit from record labels like Universal Music Group alleging illegal use of copyrighted lyrics.
• Plaintiffs recently amended their case to claim Anthropic used BitTorrent to illegally download songs.
• While settlements don’t set legal precedent, this case will be closely watched as dozens of other AI copyright lawsuits continue through the courts.
Recent Stories
DOE fusion roadmap targets 2030s commercial deployment as AI drives $9B investment
The Department of Energy has released a new roadmap targeting commercial-scale fusion power deployment by the mid-2030s, though the plan lacks specific funding commitments and relies on scientific breakthroughs that have eluded researchers for decades. The strategy emphasizes public-private partnerships and positions AI as both a research tool and motivation for developing fusion energy to meet data centers' growing electricity demands. The big picture: The DOE's roadmap aims to "deliver the public infrastructure that supports the fusion private sector scale up in the 2030s," but acknowledges it cannot commit to specific funding levels and remains subject to Congressional appropriations. Why...
Oct 17, 2025Tying it all together: Credo’s purple cables power the $4B AI data center boom
Credo, a Silicon Valley semiconductor company specializing in data center cables and chips, has seen its stock price more than double this year to $143.61, following a 245% surge in 2024. The company's signature purple cables, which cost between $300-$500 each, have become essential infrastructure for AI data centers, positioning Credo to capitalize on the trillion-dollar AI infrastructure expansion as hyperscalers like Amazon, Microsoft, and Elon Musk's xAI rapidly build out massive computing facilities. What you should know: Credo's active electrical cables (AECs) are becoming indispensable for connecting the massive GPU clusters required for AI training and inference. The company...
Oct 17, 2025Vatican launches Latin American AI network for human development
The Vatican hosted a two-day conference bringing together 50 global experts to explore how artificial intelligence can advance peace, social justice, and human development. The event launched the Latin American AI Network for Integral Human Development and established principles for ethical AI governance that prioritize human dignity over technological advancement. What you should know: The Pontifical Academy of Social Sciences, the Vatican's research body for social issues, organized the "Digital Rerum Novarum" conference on October 16-17, combining academic research with practical AI applications. Participants included leading experts from MIT, Microsoft, Columbia University, the UN, and major European institutions. The conference...