Anthropic to pay $1.5 bn to settle authors' lawsuit over AI chatbot Claude

Anthropic will pay $1.5 bn to settle a lawsuit by authors claiming it used their books without consent to train AI chatbot Claude, in what may be the largest copyright recovery ever

Artificial intelligence company Anthropic has agreed to pay $1.5 billion to settle a class-action lawsuit filed by authors who alleged the company used their books without permission to train its AI chatbot, Claude, Reuters reported.

 

The company and the plaintiffs have asked San Francisco federal judge William Alsup to approve the settlement. The agreement, first announced in August without details, could become the largest publicly reported copyright settlement in history.

 

“If approved, this landmark settlement will be the largest publicly reported copyright recovery in history, larger than any other copyright class action settlement or any individual copyright case litigated to final judgment,” the plaintiffs said in a court filing. 

 

First major AI copyright settlement

The proposed deal marks the first resolution in a wave of lawsuits against technology firms including OpenAI, Microsoft and Meta over their use of copyrighted works to train generative AI systems.

 

As part of the settlement, Anthropic will destroy downloaded copies of the books that authors accused it of using illegally. The company may still face claims over content generated by its AI models.

 

In a statement, Anthropic said it is “committed to developing safe AI systems that help people and organisations extend their capabilities, advance scientific discovery, and solve complex problems”. The company did not admit liability.

 

Authors accused Anthropic of piracy

Writers Andrea Bartz, Charles Graeber and Kirk Wallace Johnson filed the lawsuit last year, alleging that Anthropic, backed by Amazon and Alphabet, used millions of pirated books to train Claude.

 

Their claims mirror dozens of similar suits by authors, artists and news outlets who argue that AI developers misused creative works without permission. Companies, however, argue that their use constitutes fair use under copyright law.

 

Earlier rulings and trial plans

In June, Judge Alsup ruled that Anthropic had made fair use of the authors’ work for training but violated rights by storing over seven million books in a “central library” that may not have been used for training.

 

A trial was scheduled for December to decide damages, which could have run into hundreds of billions of dollars. The broader fair-use debate remains central in other AI copyright cases, with another San Francisco judge recently ruling that using copyrighted material without permission could be unlawful in many situations.   

 

Anthropic’s growth and funding surge

Anthropic recently raised $13 billion at a $183 billion valuation in a funding round led by ICONIQ, alongside Fidelity Management & Research and Lightspeed Venture Partners. Other investors include the Qatar Investment Authority, Blackstone and Coatue, Associated Press reported.

 

The company’s annualised revenue grew from about $1 billion at the start of 2025 to more than $5 billion by August. Proceeds from the Series F round will support enterprise expansion, safety research and international growth.

 

The US startup sector has seen a 75.6 per cent surge in funding in the first half of 2025, largely driven by AI investments amid the post-ChatGPT boom.

 

(With agency inputs)