Anthropic hit with largest-ever $1.5 billion penalty in copyright lawsuit — court says training AI on published material is fair use, but startup’s pirated library infringes on authors’ rights

A U.S. federal judge granted the final approval of Anthropic’s $1.5-billion settlement over the class action lawsuit authors filed against it for infringing their rights. According to Reuters, while the court ruled that training AI on books is considered fair use under copyright law, it was the fact that Anthropic kept 7 million pirated books in a central library that violated the copyrights of the authors and their publishers. This is reportedly the biggest payout in a copyright case ever, and the first one to settle among the many cases against AI firms being tried today for infringement.

While this might seem like a massive sum, the huge number of involved works and authors means that the payout amounts to a little over $200 per title. It also affirmed that AI firms’ use of existing works to train their models is fair use, which is something that many are fighting against. “We reached this settlement in 2025, after the court’s landmark ruling that training AI on books is fair ​use under copyright law — which remains the law today,” said Anthropic deputy general counsel Aparna Sridhar. “We are pleased that more than 91% of authors and publishers covered by the settlement have claimed their share of the payment, and we’re looking forward ​to bringing this matter to a close.” Because of this, some groups have opted out of the settlement and instead filed separate complaints against the AI firm.

Still, this is a landmark win for copyright holders, especially against other AI tech companies that have been scraping pirated content to train their models. This includes Nvidia, which allegedly used scripts in its NeMo Framework specifically designed for illegally downloading books, and Meta, which reportedly torrented 82TB of pirated books for AI training. The latter argued that its framework also have “non-infringing uses,” but the court said that it’s not the entire system, but specific tools within it that were the issue. As for Meta, it claimed that its use of pirated material was legal as long as it did not seed content.

Copyright infringement is one of the major issues that AI tools are facing at the moment, especially as many creators believe that these models were trained on stolen data. Anthropic’s landmark settlement is a first major win for authors and publishers — although it wasn’t exactly what some wanted, given that the settlement is small compared to the number of pirated books and that AI training is still considered fair use.