The artificial intelligence camp loves big numbers. The sum raised by OpenAI in its latest funding round: $40 billion. Expected investments on AI by Meta, Amazon, Alphabet and Microsoft this year: $320 billion. Market value of Nvidia Corp., the supplier of chips for AI firms: $4.2 trillion.<\/p>\n
Those figures are all taken by AI adherents as validating the promise and potential of the new technology. But here\u2019s a figure that points in the opposite direction: $1.05 trillion. <\/p>\n
That\u2019s how much the AI firm Anthropic could be on the hook for if a jury decides that it willfully pirated 6 million copyrighted books in the course of \u201ctraining\u201d its AI bot Claude, and if the jury decides to smack it with the maximum statutory damages of $150,000 per work. <\/p>\n
\nAnthropic faces at least the potential for business-ending liability.<\/p>\n<\/blockquote>\n
\u2014 Edward Lee, Santa Clara University School of Law<\/p>\n
That places Anthropic in \u201ca legal fight for its very existence<\/a>,\u201d reckons Edward Lee, an expert in intellectual property law at the Santa Clara University School of Law. <\/p>\n
The threat arose July 17, when U.S. District Judge William Alsup certified a copyright infringement lawsuit brought by several published authors against Anthropic as a class action<\/a>. <\/p>\n
I wrote about the case last month<\/a>. At that time, Alsup had rejected the plaintiffs\u2019 copyright infringement claim, finding that Anthropic\u2019s use of copyrighted material to develop its AI bot fell within a copyright exemption known as \u201cfair use.\u201d <\/p>\n
But he also found that Anthropic\u2019s downloading of copies of 7 million books from online \u201cshadow libraries,\u201d which included countless copyrighted works, without permission, smelled like piracy. <\/p>\n
\u201cWe will have a trial on the pirated copies … and the resulting damages,\u201d he advised Anthropic, ominously. He put meat on those bones with his subsequent order, designating the class as copyright owners of books Anthropic downloaded from the shadow libraries LibGen and PiLiMi. (Several of my own books<\/a> wound up in Books3, another such library, but Books3 isn\u2019t part of this case and I don\u2019t know whether my books are in the other libraries.) <\/p>\n
Newsletter <\/p>\n
Get the latest from Michael Hiltzik<\/p>\n
Commentary on economics and more from a Pulitzer Prize winner.<\/p>\n
Enter email address <\/p>\n
Sign Me Up <\/p>\n
You may occasionally receive promotional content from the Los Angeles Times. <\/p>\n
The class certification could significantly streamline the Anthropic litigation. \u201cInstead of millions of separate lawsuits with millions of juries,\u201d Alsup wrote in his original ruling, \u201cwe will have a single proceeding before a single jury.\u201d<\/p>\n
The class certification adds another wrinkle \u2014 potentially a major one \u2014 to the ongoing legal wrangling over the use of published works to \u201ctrain\u201d AI systems. The process involves feeding enormous quantities of published material \u2014 some of it scraped from the web, some of it drawn from digitized libraries that can include copyrighted content as well as material in the public domain. <\/p>\n
The goal is to provide AI bots with enough data to enable them to glean patterns of language that they can regurgitate, when asked a question, in a form that seems to be (but isn\u2019t really) the output of an intelligent entity.<\/p>\n
Authors, musicians and artists have filed numerous lawsuits asserting that this process infringes their copyrights, since in most cases they haven\u2019t granted permission or been compensated for it for the use. <\/p>\n
One of the most recent such cases, filed last month in New York federal court by authors including Kai Bird \u2014 co-author of \u201cAmerican Prometheus,\u201d which became the authorized source of the movie \u201cOppenheimer\u201d \u2014 charges that Microsoft downloaded \u201capproximately 200,000 pirated books\u201d<\/a> via Books3 to train its own AI bot, Megatron. <\/p>\n
Like many of the other copyright cases, Bird and his fellow plaintiffs contend that the company could have trained Megatron using works in the public domain or obtained under licensing. \u201cBut either of those would have taken longer and cost more money than the option Microsoft chose,\u201d the plaintiffs state: to train its bot \u201cwithout permission and compensation as if the laws protecting copyrighted works did not exist.\u201d<\/p>\n
I asked Microsoft for a response, but haven\u2019t received a reply.<\/p>\n
Among judges who have pondered the issues, the tide seems to be building in favor of regarding the training process as fair use. Indeed, Alsup himself came to that conclusion in the Anthropic case, ruling that use of the downloaded material for AI training was fair use \u2014 but he also heard evidence that Anthropic had held on to the downloaded material for other purposes \u2014 specifically to build a research library of its own. That\u2019s not fair use, he found, exposing Anthropic to accusations of copyright piracy.<\/p>\n
Alsup\u2019s ruling was unusual, but also \u201cSolomonic,\u201d Lee told me. His finding of fair use delivered a \u201cpartial victory\u201d for Anthropic, but his finding of possible piracy put Anthropic in \u201ca very difficult spot,\u201d Lee says. That\u2019s because the financial penalties for copyright infringement can be gargantuan<\/a>, ranging from $750 per work to $150,000 \u2014 the latter if a jury finds that the user engaged in willful infringement. <\/p>\n
As many as 7 million works may have been downloaded by Anthropic, according to filings in the lawsuit, though an undetermined number of those works may have been duplicated in the two shadow libraries the firm used, and may also have been duplicated among copyrighted works the firm actually paid for. The number of works won\u2019t be known until at least Sept. 1, the deadline Alsup has given the plaintiffs to submit a list of all the allegedly infringed works downloaded from the shadow libraries. <\/p>\n
If subtracting the duplicates brings the total of individual infringed works to 7 million, a $150,000 bill per work would total $1.05 trillion. That would financially swamp Anthropic: The company\u2019s annual revenue is estimated at about $3 billion, and its value on the private market is estimated at about $100 billion.<\/p>\n