POLITICO Tech

Episode: "What Anthropic’s big payout means for AI and copyright"

Date: September 11, 2025
Host: Stephen Overle
Guest: Keith Kuperschmidt (CEO, Copyright Alliance)

Overview

This episode explores the implications of Anthropic’s proposed $1.5 billion settlement with authors’ groups over the use of copyrighted books for AI training. Stephen Overle and Keith Kuperschmidt delve into whether this signals a new era of accountability for AI companies, the complexities of fair use in machine learning, and the battle lines forming in courts across the U.S. over copyright and artificial intelligence. The conversation also widens to possible outcomes for ongoing and future cases, and questions whether legal action or negotiated licensing is the best path forward.

Key Discussion Points and Insights

1. Anthropic’s Settlement: What Does It Mean?

• Summary: Anthropic, an AI company, agreed to pay $1.5 billion to authors whose books were used to train its models—the first settlement of its kind at this scale, though not finalized due to ongoing court scrutiny.

• Kuperschmidt’s stance: The settlement is seen as a positive indication that tech companies can compensate creators without harming their business.

  • Quote [02:05]:
    "It sends a message to AI companies that they're going to be held accountable...they need to be responsible, they need to act ethically as well, otherwise they're going to be subject to serious consequences."

• Financial Impact: Despite the hefty settlement, Anthropic quickly raised much more capital, showing that such payouts don’t threaten their viability.

  • Quote [02:59]:
    "They agreed to the $1.5 billion settlement. They got like an infusion of $10 billion... It's a fly in the back of their neck or something, quite honestly."

2. Where Are We in the AI Copyright Legal Saga?

• This is Not the End: The Anthropic case is just the beginning, with around 50 similar lawsuits pending.
  • Quote [03:34]:
    "We're in the top of the first inning, basically, so long way to go."
• Multiple Cases, Diverse Scenarios: Each major AI copyright case involves unique facts and will be decided independently.
• Ongoing Uncertainty: There’s no single precedent set yet; rulings may vary.

3. Breaking Down the Legal Issues: “Fair Use” and Illicit Sources

• Key Distinctions in Usage: The case considered three categories:
  1. Training on works legally accessed;
  2. Works Anthropic bought and copied;
  3. Works obtained from “shadow libraries” (illicit sources).
• Court’s Findings:
  • The first two kinds (if legally obtained) were found “transformative” and were ruled fair use by the district court.
  • Use of pirated books from shadow libraries was not fair use and led to liability.
    • Quote [06:17]:
      "With these pirated works that they got right from these shadow libraries... that worked against them... and that's what the judge said. And it could have... lead to billions and billions... in terms of settlement..."

4. Is the Settlement a Win or Loss for Creators?

• Some argue it’s a partial loss for authors, since many uses were found permissible.

• Kuperschmidt emphasizes the nuanced nature of the ruling:

  • Illegal use is clear-cut liability;
  • Some uses—even if financially significant—are still fair use under current law.
  • Quote [07:36]:
    "One thing you have to look at... why was Anthropic liable here? Well, they were liable because they went and they copied pirated works from an illicit source. I wish I could say that Anthropic was the only AI company doing that, but they're not."

• Appeals are likely, potentially going up to the Ninth Circuit—or even the Supreme Court.

5. Precedent and the Road Ahead

• Limited Immediate Precedent: Each case depends heavily on its facts—no single case will definitively resolve all questions.
  • Quote [10:26]:
    "I don't think any of the cases themselves just standing alone is going to set some type of precedent... All are going to come out a little bit differently depending on the facts."
• Message Sent: There is now a clear risk for AI companies that use pirated content—they will be held accountable.
  • Quote [11:33]:
    "The settlement, I think, sends a message to all AI companies... that they will be held accountable. Because that's exactly what happened here..."

6. Is This Opening the Litigation Floodgates?

• Litigation Already Surging: Regardless of Anthropic’s settlement, lawsuits are proliferating—two more filed in the last week alone.
  • Quote [12:10]:
    "Regardless of this case, there have been so many AI cases, AI training cases filed."
• Teaching Moments: New rulings give both creators and AI companies lessons for future legal battles.

7. Should the Courts Decide, or Is It Up to Congress?

• Courts as the First Stop: Kuperschmidt believes early court rulings will shape initial expectations.
  • Baseball analogy: we’re early in the “game,” and outcomes may shift as “innings” pass.
    • Quote [13:51]:
      "Yeah, I think the courts are the best venue, at least at this point."
• The Case for Licensing Over Litigation:
  • The guest hopes that settlements will lead to more voluntary licensing deals, not just lawsuits.
    • Quote [16:16]:
      "We're just saying just respect our works, be responsible, be ethical, and let's sit down and figure out a licensing mechanism that works. Licensing is not impossible. It is happening now..."
  • Right now, most major players are committing to litigation, while smaller companies are more likely to negotiate licenses.

Notable Quotes & Memorable Moments

• Fairness and Feasibility:
  • [02:05] Keith Kuperschmidt: "It sends a message to AI companies that they're going to be held accountable...and that they need to be responsible, they need to act ethically as well."
• The Baseball Analogy:
  • [03:34] Kuperschmidt: "We're in the top of the first inning, basically, so long way to go."
• On Shadow Libraries:
  • [06:17] Kuperschmidt: "They got them from illicit sources. So that's not good. Right. That worked against them, but they also used them...just kept them in a library. And so that stepped over the line."
• On Licensing as the Way Forward:
  • [16:16] Kuperschmidt: "We're just saying, just respect our works...and let's sit down and figure out a licensing mechanism that works."
• Final Hope:
  • [16:16] Kuperschmidt: "...that is absolutely my hope. It's been my hope for a long time that just come to the table. What they're trying to get is a freebie."

Timestamps for Key Segments

• [00:30–01:53] Introduction and context: Anthropic’s $1.5B settlement
• [01:54–02:59] The Copyright Alliance’s view on the settlement’s fairness and impact
• [03:23–04:25] The bigger picture: Anthropic as just one of many pending cases
• [04:25–06:13] Explanation of the legal issues, fair use distinctions, and “shadow libraries”
• [06:56–09:35] Wins and losses for creators; implications of the court’s opinion; possible appeals
• [10:02–11:52] Is the Anthropic case a precedent or a one-off event?
• [11:52–13:24] The proliferation of lawsuits and what these cases teach plaintiffs and companies
• [13:24–14:32] Courts vs. Congress: Where should complex copyright/AI disputes be solved?
• [14:34–16:16] Licensing vs. litigation: Possible resolutions and emerging industry trends

Conclusion

The Anthropic case, while splashy with dollar figures, is only the start of an ongoing struggle over AI and copyright. Key takeaways:

• The legal landscape is far from settled—dozens of cases remain to be decided, each with its own circumstances.
• Courts are likely to shape initial outcomes, but negotiated licensing could provide a more sustainable avenue.
• The settlement sends a message, but is not a definitive roadmap.
• Both sides—creators and AI companies—are learning as they go, and the industry remains in its “early innings.”

For now, the fight is on—and its resolution may reshape the boundaries of creativity, technology, and ownership for years to come.