Matt O’Brien, AP News:

Artificial intelligence company Anthropic has agreed to pay $1.5 billion to settle a class-action lawsuit by book authors who say the company took pirated copies of their works to train its chatbot.

The landmark settlement, if approved by a judge as soon as Monday, could mark a turning point in legal battles between AI companies and the writers, visual artists and other creative professionals who accuse them of copyright infringement.

The company has agreed to pay authors or publishers about $3,000 for each of an estimated 500,000 books covered by the settlement.

“As best as we can tell, it’s the largest copyright recovery ever,” said Justin Nelson, a lawyer for the authors. “It is the first of its kind in the AI era.”

$3,000 per book is substantial for most authors, but the total settlement is relatively insignificant for Anthropic, which, just days earlier, was newly valued at $183 billion. The company was facing fines of up to $150,000 for each of the 7 million books they were found to have pirated—an impossible trillion-dollar penalty. Even the statutory minimum for copyright infringement—$750 per book—would have cost them more than $5 billion. They’re undoubtedly thrilled to escape with “just” a $1.5 billion fine as a price of doing business.

Why are they paying out on 500,000 titles instead of seven million? According to the Authors Guild:

The class is limited to books that (1) have an ISBN or ASIN, (2) were registered with the U.S. Copyright Office within five years of publication, and (3) were registered before Anthropic downloaded them (or within three months of publication). Duplicates of books were removed as well as foreign editions, which often lack ISBNs and/or copyright registration. Further, many books in dataset were never registered with the Copyright Office, or were registered too late to qualify, lacked ISBNs or ASINs.

The lesson for authors: protect your rights and register your books with the Copyright Office.

The lesson for companies: steal it all and pay a minuscule portion of your valuation later.

See Also: The 39-page settlement; The New York Times (gift link); M.G. Siegler’s “cynical” take.