Anthropic Reaches $1.5B Settlement in Lawsuit on AI Piracy

The AI company Anthropic, known for developing Claude, reached a $1.5 billion settlement after writers accused it of using pirated copies of their works to build its models. The proposed deal, which still requires approval from a federal judge, could become the largest public copyright payout ever recorded. 

The dispute began in 2024 when writers Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson filed a case accusing Anthropic of feeding pirated copies of their books into its AI systems. Their complaint later grew into a class action that covered hundreds of thousands of writers and publishers. Evidence presented in court showed that Anthropic had collected more than seven million works from piracy sites, including, Library Genesis, Books3 and the Pirate Library Mirror. 

Judge William Alsup, who oversaw the case, ruled earlier this year that training AI with copyrighted material is not automatically unlawful. However, he also found that Anthropic’s use of pirated files was improper because the works were not obtained through any legal or licensed channel. That decision left the company exposed to major financial penalties if the case had moved to trial. Legal analysts warned that a loss could have cost Anthropic several billions of dollars, potentially threatening its survival. 

By choosing to settle, Anthropic avoided that risk while offering compensation to the affected authors. Under the agreement, each writer whose work was involved would receive roughly $3,000, with an estimated 500,000 titles included. The Authors Guild welcomed the outcome, calling it a major victory for creative professionals. Its chief executive, Mary Rasenberger, described the deal as a strong warning to technology firms that copying books without permission is not only unfair but also carries serious financial consequences. 

This legal outcome comes as artificial intelligence companies face rising challenges from both regulators and competitors. In August, X Corp and X.AI filed an antitrust lawsuit against Apple and OpenAI, accusing them of unfairly controlling the smartphone and AI chatbot markets. Meanwhile, the Texas attorney general has opened an investigation into Meta and Character.ai, questioning whether their products misled young users by presenting themselves as therapeutic tools. 

The Anthropic settlement reflects a wider struggle over how AI firms build their systems and where the data comes from. For authors, the agreement offers long-awaited recognition that their work has value in the digital era. For AI companies, it sends a message that innovation cannot come at the cost of ignoring copyright law. 

Tech firms like D-Wave Quantum Inc. (NYSE: QBTS) will be following these developments shaping the laws applicable to AI innovations and could learn how to steer clear of such issues as they develop their products and solutions. 

NOTE TO INVESTORS: The latest news and updates relating to D-Wave Quantum Inc. (NYSE: QBTS) are available in the company’s newsroom at https://ibn.fm/QBTS 

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