AI firm Anthropic has agreed to pay $1.5 billion to settle a class-action lawsuit filed by authors who accused the company of using pirated books to train its artificial intelligence models. This landmark settlement, requiring court approval, is the largest copyright recovery in history and addresses allegations of unauthorized use of copyrighted works.
The lawsuit was brought by authors including Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson, who claimed that Anthropic stole their copyrighted material to develop its Claude AI chatbot. They alleged that the company built a multi-billion dollar business by accessing millions of pirated books without permission, infringing on their intellectual property rights.
In a previous ruling in June 2025, U.S. District Judge William Alsup found that using books for AI training is transformative and permissible under fair use doctrines, but he allowed the piracy claims to proceed. He noted that Anthropic had amassed a library of over seven million pirated books and faced potential damages of up to $150,000 per copyrighted work.
The settlement was announced on September 5, 2025, and is seen as a strategic move to avoid a trial scheduled for December. Lawyers for the authors, including Justin Nelson, praised it as a precedent-setting agreement that ensures meaningful compensation for creators and reinforces copyright protections in the AI era.
Anthropic, which is backed by major investors like Amazon and Google, stated that the agreement resolves the plaintiffs’ remaining legacy claims. Deputy General Counsel Aparna Sridhar emphasized the company’s commitment to developing safe and beneficial AI systems that extend human capabilities and advance scientific discovery.
This case is part of a broader industry trend where AI companies face legal challenges over their use of training data. Similar lawsuits are ongoing against firms like OpenAI, Microsoft, and Meta, raising questions about the boundaries of copyright law in the context of rapidly evolving AI technologies.
Experts, such as Alex Yang from London Business School, suggest that settlements like this could encourage more collaborative approaches between AI developers and content creators. Compensating human contributors is essential for fostering trust, innovation, and sustainable growth in the AI sector.
The court’s approval of this settlement will be closely monitored, as it could influence how future copyright disputes are resolved and set new standards for ethical AI development practices worldwide.