Anthropic’s $1.5B Copyright Settlement Highlights Legal Murk

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A federal judge ordered Anthropic to pay a $1.5 billion copyright settlement to a group of writers whose works were used to train the company’s AI models - but ruled that the training itself was legal, drawing a line between how the books were obtained and how they were used.

Judge William Alsup’s ruling, one of the first of its kind, found that Anthropic had pirated books from illegal online shadow libraries to build its training datasets. The training process, however, was a different matter. According to the ruling, Alsup compared the way a large language model ingests trillions of words to a writer’s study of literature.

“Like any reader aspiring to be a writer, Anthropic’s LLMs trained upon works not to race ahead and replicate or supplant them - but to turn a hard corner and create something different.”

- Judge William Alsup

Cathy Gellis, an attorney specialising in intellectual property and technology, told TechCrunch the decision is broadly favorable to AI companies. Anthropic projects roughly $200 billion in annual revenue by 2028, making a $1.5 billion fine a manageable cost. “I think it is generally good news for AI training that he looked at what was going on and really sort of thought it analogous to reading a copyrighted work as opposed to copying a copyrighted work,” Gellis said. “Copyright law hinges on copying, but it doesn’t hinge on using the work or experiencing the work, consuming the work, reading the work.”

A 50-year-old law meets a new technology

Copyright law has not been updated since 1976, leaving judges to apply half-century-old guidelines to questions that could define the AI industry’s future. Jason Henderson, Senior Attorney and Founder of the IP and Media Practice at JWL International, described the current state as unsettled. “Everybody is very worried right now because the law is all over the place,” Henderson told TechCrunch. “They know that the AI model has been trained on so much stuff, and the law has not really caught up to that question.”

Central to most cases is the doctrine of fair use - specifically whether AI training is “transformative” enough to be legally permissible without the rights-holder’s consent. Judges weigh the purpose of the use, how much of the original work was used, and the effect on the market. Henderson noted a pattern forming in decisions: courts tend to rule against AI companies when training data is used to directly compete with the original works’ market, but outcomes remain inconsistent across cases.

Most published authors, meanwhile, contributed to these training datasets without their knowledge or consent - a fact that has generated significant legal and political pressure even as the courts work through the underlying questions.

// read moreSony Music and Warner Sue Anthropic Over AI Training CopyrightNewsThey Bought Books to Cut Them Apart. The Court Said That Was Legal.NewsAI Images and Copyright: Commercial Use Rules in 2026Guides

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