A U.S. District Judge raised strenuous concerns over Anthropic’s proposed $1.5 billion settlement with authors. The judge calls the deal incomplete and unfair to millions of copyright holders.
What’s Happening & Why This Matters
The legal battle between Anthropic, a leading AI company, and a massive class of authors hit an unexpected roadblock. At a recent hearing, Judge William Alsup criticised the proposed $1.5 billion settlement. He described the deal asl being forced “down the throat of authors.” The case revolves around Anthropic’s unauthorised use of millions of books to train its AI models.
Initially, Anthropic faced potential damages exceeding $1 trillion, as the class included nearly seven million affected works. However, the current deal covers fewer than 500,000 works — a small portion of the total. Critics argue that Anthropic is escaping with a payout that barely dents its financial standing. The company, valued at $183 billion, recently raised $13 billion in funding — nearly ten times the settlement amount — while continuing to profit from models trained on the very works at issue.
Defector reported that the settlement doesn’t require Anthropic to admit wrongdoing, allowing it to keep building its business while leaving many authors uncompensated. This discrepancy has raised questions about fairness and transparency in the deal.
Judge’s Concerns
Judge Alsup’s objections go beyond financial figures. In a written order, he outlined a series of critical flaws in the proposal, noting that many essential details remain unresolved:
- The Works List and Class List are incomplete.
- There is no clear Claim Form or process for notification and dispute resolution.
- The settlement fails to explain how payments will be divided among multiple claimants for the same work.
Calling the deal “nowhere close to complete,” Alsup denied preliminary approval and ordered both Anthropic and the authors’ legal team to recalibrate the settlement.
One of his key requirements is that anyone with copyright ownership must opt in for a work to be included. If even one rights holder opts out, the work will not be covered under the agreement. Additionally, Alsup recommended that disputes over ownership or submitted claims be resolved in state courts, not through the current federal process.
Why This Case Matters for AI and Copyright
This case represents the tensions between the AI innovators and creators. As companies like Anthropic develop powerful models using massive datasets, questions of consent, compensation, and ethical boundaries grow more pressing.
For authors, the stakes are immense. Millions of works have been used without permission. A settlement sets the tone for future copyright negotiations across the industries. For AI, it’s a wake-up call that the era of unchecked data scraping is limited.
TF Summary: What’s Next
Judge Alsup’s rejection forces Anthropic and the authors’ lawyers back to the negotiating table. Until the settlement’s terms are finalised and all key issues are addressed, approval will remain out of reach.
MY FORECAST: If a fair agreement isn’t reached, Anthropic faces renewed litigation — with damages potentially soaring toward the $1 trillion mark. The judge’s pushback is a critical moment for both AI companies and creators. At the moment, the law is protecting intellectual property in the age of machine learning.
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