A federal judge in California has given preliminary approval to Amazon.com Inc. (NASDAQ: AMZN) and Alphabet Inc. (NASDAQ: GOOG) (NASDAQ: GOOGL)-backed Anthropic's $1.5 billion settlement with authors who accused the AI company of using millions of pirated books to train its Claude chatbot.
Judge Backs Landmark Settlement
On Thursday, U.S. District Judge William Alsup called the proposed deal fair during a hearing, giving it preliminary approval after initially raising concerns earlier this month, reported Reuters.
Final approval will be determined once affected authors are notified and given the chance to submit claims.
The settlement is the first major resolution in a string of lawsuits targeting AI developers for their use of copyrighted works, setting what industry experts say could be a precedent for future cases.
Previously, Judge Alsup determined the company infringed their rights by storing over 7 million pirated books in a "central library" that wasn't strictly intended for training purposes.
Plaintiffs Andrea Bartz, Charles Graeber and Kirk Wallace Johnson said the ruling “brings us one step closer to real accountability for Anthropic and puts all AI companies on notice they can't shortcut the law or override creators' rights."
Originally headed for trial in December, the case carried potential damages in the hundreds of billions of dollars.
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Anthropic Hits $183 Billion Valuation With $13 Billion Funding
Earlier this month, Anthropic's valuation skyrocketed to $183 billion after securing a $13 billion funding round, led by Fidelity Management & Research and Lightspeed Venture Partners.
The company's run-rate revenue has also climbed sharply, rising from $1 billion at the start of 2025 to more than $5 billion by August.
The aforementioned case underscores growing legal risks for companies like OpenAI, Microsoft Corp. (NASDAQ: MSFT) and Meta Platforms Inc. (NASDAQ: META), which face similar lawsuits from authors, artists and publishers.
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