Nearly half a million writers stand to receive a payout of at least $3,000 each, courtesy of a historic $1.5 billion class-action settlement in a lawsuit filed by a group of authors against Anthropic.

While this settlement ranks as the largest in U.S. copyright law history, it is far from a win for writers—it’s just another victory for Big Tech.

Tech giants are in a frantic race to hoard as much written content as possible to train their large language models (LLMs), the technology powering innovative AI chat tools like ChatGPT and Claude. Yet these very products pose a threat to creative industries, even if their outputs are often unremarkable. The more data an LLM ingests, the more sophisticated it becomes—but after scraping nearly the entire internet, these companies are rapidly running out of fresh material to use.

That’s why Anthropic—the maker of Claude—resorted to pirating millions of books from “shadow libraries” to feed its AI systems. The lawsuit in question, Bartz v. Anthropic, is one of dozens filed against major tech firms like Meta, Google, OpenAI, and Midjourney, all challenging the legality of training AI on copyrighted works.

But here’s the catch: writers aren’t getting this settlement because their work was used to train AI. Instead, it’s merely an expensive slap on the wrist for Anthropic—a company that just secured an additional $13 billion in funding—for illegally downloading books rather than purchasing them.

Back in June, U.S. District Judge William Alsup ruled in favor of Anthropic, declaring that training AI on copyrighted material is legal. The judge argued that this practice qualifies as “transformative” under the fair use doctrine—a provision of copyright law that hasn’t been updated since 1976.

“Much like a reader who aspires to be a writer, Anthropic’s LLMs studied these works not to copy or replace them, but to pivot in a new direction and create something entirely different,” Judge Alsup explained in his ruling.

Crucially, it was the act of piracy—not the AI training itself—that led Judge Alsup to move the case toward trial. But with Anthropic agreeing to the settlement, a trial is now off the table.

“Pending approval, today’s settlement will resolve the plaintiffs’ remaining legacy claims,” Aparna Sridhar, Anthropic’s deputy general counsel, said in a statement. “We remain dedicated to developing safe AI systems that empower people and organizations to expand their capabilities, drive scientific progress, and tackle complex challenges.”

As dozens more lawsuits over the intersection of AI and copyright make their way through the courts, judges will now have Bartz v. Anthropic to cite as a precedent. However, given the far-reaching consequences of such decisions, there’s a chance future judges may reach a different conclusion.