Amazon (AMZN) and Alphabet (GOOGL)-backed Anthropic has agreed to pay $1.5 billion to settle a class-action lawsuit brought by a group of U.S. authors. The writers accused the AI startup of using pirated books to train its AI chatbot, Claude, without permission.
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The settlement includes cash payments, with authors set to receive about $3,000 for each of the 500,000 books involved.
As part of the deal, Anthropic, backed by , will also destroy the illegally downloaded and stored book files.
Background of the Lawsuit
The lawsuit was originally filed in 2024 by authors Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson, who claimed Anthropic built its AI models using books illegally downloaded from shadow libraries. Later, the case expanded into a class action.
In June 2025, a federal judge ruled that training AI models on legally acquired copyrighted books is considered “fair use.” However, he said Anthropic was liable for downloading millions of books from known pirated sites such as Library Genesis and Pirate Library Mirror.
Anthropic Avoids Billion-Dollar Trial
With a trial scheduled for December 2025, lawyers for the authors warned that potential damages could have reached “multiple billions of dollars.” Thus, Anthropic likely opted to settle rather than risk a verdict that could have put its survival in danger.
A hearing to approve the settlement is scheduled for September 8. If finalized, it could set a precedent for other AI companies, such as OpenAI and Meta (META), facing similar lawsuits.
The settlement may push more AI companies to pursue licensing deals with authors and publishers to avoid similar legal exposure.
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