Anthropic, one of the fastest-growing artificial intelligence companies, has agreed to pay at least $1.5 billion to settle a lawsuit over its use of pirated books in training large-language models, according to the Wall Street Journal. If approved, the deal would mark the largest settlement of its kind, underscoring the growing tension between technology firms and content creators over how AI models are trained.

The lawsuit, filed in California last summer, accused Anthropic of using millions of unlawfully obtained works to develop its Claude AI system. The plaintiffs—authors Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson—alleged the company violated copyright protections and attempted to conceal the scope of its actions. Per the Wall Street Journal, the case gained class-action status in July, ultimately covering around 500,000 books.

A key turning point came in June, when a judge ruled that Anthropic could rely on some copyrighted materials under certain conditions, since the models transformed the content into something new. However, the court also determined that “fair use” protections did not extend to more than seven million titles sourced from known piracy websites. This ruling paved the way for settlement talks, which concluded last month with an undisclosed preliminary agreement before the proposed payout became public.

Related: Federal Judge Sides with Meta in Authors’ AI Copyright Lawsuit

Under the terms of the settlement, Anthropic will not only compensate affected authors but also destroy the pirated data sets it used. Payments from the fund will go toward class members and related expenses. Maria Pallante, president and chief executive of the Association of American Publishers, said the case sends a clear message about the risks companies take when relying on pirated materials.

Despite the legal setback, Anthropic continues to attract investor confidence. The company is valued at $183 billion after raising an additional $13 billion in its latest funding round, a sign of unrelenting interest in artificial intelligence despite industry-wide financial losses.

In a statement Friday, Anthropic’s Deputy General Counsel Aparna Sridhar emphasized the company’s commitment to advancing safe AI systems designed to assist people, drive scientific progress, and address complex challenges.

Source: The Wall Street Journal