A class action over pirated books exposes the 'responsible' AI company to penalties that could bankrupt it — and reshape the entire industry

This is the full text of a post first published on Obsolete, a Substack that I write about the intersection of capitalism, geopolitics, and artificial intelligence. I’m a freelance journalist and the author of a forthcoming book called Obsolete: Power, Profit, and the Race to Build Machine Superintelligence. Consider subscribing to stay up to date with my work.

Anthropic, the AI startup that's long presented itself as the industry's safe and ethical choice, is now facing legal penalties that could bankrupt the company. Damages resulting from its mass use of pirated books would likely exceed a billion dollars, with the statutory maximum stretching into the hundreds of billions.

Last week, William Alsup, a federal judge in San Francisco, certified a class action lawsuit against Anthropic on [...]

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Outline:

(00:11) A class action over pirated books exposes the responsible AI company to penalties that could bankrupt it -- and reshape the entire industry

(03:21) From fair use win to catastrophic liability

(06:14) Respecting copyright is not doable

(07:14) Anthropic made some mistakes

(09:39) Why the other companies should be nervous

(11:01) What's next

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First published:
July 25th, 2025

Source:
https://www.lesswrong.com/posts/ybHtafxQeaNFQJM22/anthropic-faces-potentially-business-ending-copyright

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Narrated by TYPE III AUDIO.

“Anthropic Faces Potentially ‘Business-Ending’ Copyright Lawsuit” by garrison

LessWrong (30+ Karma)