Anthropic to pay $1.5 billion in copyright settlement

Anthropic has agreed to pay at least $1.5 billion to a group of authors and publishers in the largest copyright settlement in U.S. history.

Why it matters: The settlement marks a turning point in the clash between AI companies and content owners, which could alter how training data is sourced and inspire more licensing deals.

Zoom in: The judge ruled that Anthropic's approach to buying physical books and making digital copies for training its large language models was fair use, but identified that the company had illegally acquired millions of copyrighted books.

• Anthropic will pay an estimated $3,000 per work to roughly 500,000 authors.
• The company will also delete the pirated works it downloaded from shadow libraries like Library Genesis and Pirate Library Mirror.
• "We remain committed to developing safe AI systems that help people and organizations extend their capabilities, advance scientific discovery, and solve complex problems," Anthropic deputy general counsel Aparna Sridhar said in a statement.

Between the lines: The case spotlights a tension in the AI era with courts ruling that training on copyrighted material can qualify as fair use but how companies obtain that data still carries legal ramifications.

Zoom out: Since the lawsuit was settled instead of going to trial, it will not set a legal precedent.

• But it raises the stakes for dozens of similar lawsuits and could push more AI companies toward licensing, much like the battle between the music streaming service and record labels after Napster.

What's next: The judge must approve the settlement.