Anthropic to pay authors $1.5 billion to settle lawsuit over pirated
books used to train AI chatbots
[September 06, 2025]
By MATT O'BRIEN
NEW YORK (AP) — Artificial intelligence company Anthropic has agreed to
pay $1.5 billion to settle a class-action lawsuit by book authors who
say the company took pirated copies of their works to train its chatbot.
The landmark settlement, if approved by a judge as soon as Monday, could
mark a turning point in legal battles between AI companies and the
writers, visual artists and other creative professionals who accuse them
of copyright infringement.
The company has agreed to pay authors or publishers about $3,000 for
each of an estimated 500,000 books covered by the settlement.
“As best as we can tell, it’s the largest copyright recovery ever,” said
Justin Nelson, a lawyer for the authors. “It is the first of its kind in
the AI era.”
A trio of authors — thriller novelist Andrea Bartz and nonfiction
writers Charles Graeber and Kirk Wallace Johnson — sued last year and
now represent a broader group of writers and publishers whose books
Anthropic downloaded to train its chatbot Claude.
A federal judge dealt the case a mixed ruling in June, finding that
training AI chatbots on copyrighted books wasn’t illegal but that
Anthropic wrongfully acquired millions of books through pirate websites.
If Anthropic had not settled, experts say losing the case after a
scheduled December trial could have cost the San Francisco-based company
even more money.
“We were looking at a strong possibility of multiple billions of
dollars, enough to potentially cripple or even put Anthropic out of
business,” said William Long, a legal analyst for Wolters Kluwer.
U.S. District Judge William Alsup of San Francisco has scheduled a
Monday hearing to review the settlement terms.
Anthropic said in a statement Friday that the settlement, if approved,
“will resolve the plaintiffs’ remaining legacy claims.”
“We remain committed to developing safe AI systems that help people and
organizations extend their capabilities, advance scientific discovery,
and solve complex problems,” said Aparna Sridhar, the company's deputy
general counsel.
As part of the settlement, the company has also agreed to destroy the
original book files it downloaded.
Books are known to be important sources of data — in essence, billions
of words carefully strung together — that are needed to build the AI
large language models behind chatbots like Anthropic’s Claude and its
chief rival, OpenAI’s ChatGPT.
Alsup’s June ruling found that Anthropic had downloaded more than 7
million digitized books that it “knew had been pirated.” It started with
nearly 200,000 from an online library called Books3, assembled by AI
researchers outside of OpenAI to match the vast collections on which
ChatGPT was trained.
Debut thriller novel “The Lost Night” by Bartz, a lead plaintiff in the
case, was among those found in the dataset.
Anthropic later took at least 5 million copies from the pirate website
Library Genesis, or LibGen, and at least 2 million copies from the
Pirate Library Mirror, Alsup wrote.
The Authors Guild told its thousands of members last month that it
expected “damages will be minimally $750 per work and could be much
higher” if Anthropic was found at trial to have willfully infringed
their copyrights. The settlement's higher award — approximately $3,000
per work — likely reflects a smaller pool of affected books, after
taking out duplicates and those without copyright.
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Thriller novelist Andrea Bartz is photographed in her home, in the
Brooklyn borough of New York, Thursday, Sept. 4, 2025 (AP
Photo/Richard Drew)
 On Friday, Mary Rasenberger, CEO of
the Authors Guild, called the settlement “an excellent result for
authors, publishers, and rightsholders generally, sending a strong
message to the AI industry that there are serious consequences when
they pirate authors’ works to train their AI, robbing those least
able to afford it.”
The Danish Rights Alliance, which successfully fought to take down
one of those shadow libraries, said Friday that the settlement would
be of little help to European writers and publishers whose works
aren’t registered with the U.S. Copyright Office.
“On the one hand, it’s comforting to see that compiling AI training
datasets by downloading millions of books from known illegal
file-sharing sites comes at a price,” said Thomas Heldrup, the
group’s head of content protection and enforcement.
On the other hand, Heldrup said it fits a tech industry playbook to
grow a business first and later pay a relatively small fine,
compared to the size of the business, for breaking the rules.
“It is my understanding that these companies see a settlement like
the Anthropic one as a price of conducting business in a fiercely
competitive space,” Heldrup said.
The privately held Anthropic, founded by ex-OpenAI leaders in 2021,
earlier this week put its value at $183 billion after raising
another $13 billion in investments.
Anthropic also said it expects to make $5 billion in sales this
year, but, like OpenAI and many other AI startups, it has never
reported making a profit, relying instead on investors to back the
high costs of developing AI technology for the expectation of future
payoffs.
The settlement could influence other disputes, including an ongoing
lawsuit by authors and newspapers against OpenAI and its business
partner Microsoft, and cases against Metaand Midjourney. And just as
the Anthropic settlement terms were filed, another group of authors
sued Apple on Friday in the same San Francisco federal court.
“This indicates that maybe for other cases, it’s possible for
creators and AI companies to reach settlements without having to
essentially go for broke in court,” said Long, the legal analyst.
The industry, including Anthropic, had largely praised Alsup’s June
ruling because he found that training AI systems on copyrighted
works so chatbots can produce their own passages of text qualified
as “fair use” under U.S. copyright law because it was
“quintessentially transformative.”
Comparing the AI model to “any reader aspiring to be a writer,”
Alsup wrote that Anthropic "trained upon works not to race ahead and
replicate or supplant them — but to turn a hard corner and create
something different."
But documents disclosed in court showed Anthropic employees’
internal concerns about the legality of their use of pirate sites.
The company later shifted its approach and hired Tom Turvey, the
former Google executive in charge of Google Books, a searchable
library of digitized books that successfully weathered years of
copyright battles.
With his help, Anthropic began buying books in bulk, tearing off the
bindings and scanning each page before feeding the digitized
versions into its AI model, according to court documents. That was
legal but didn’t undo the earlier piracy, according to the judge.
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