The AI Settlement Friction: Who Actually Owns the Training Data?
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As Anthropic's $1.5 billion payout hits accounts, a battle is erupting between authors, publishers, and agents over the monetization of pirated works.
The headline story is the $1.5 billion settlement from Anthropic, as TechCrunch first reported, but for those tracking the fintech of AI training, the real story is the messy struggle over who owns the right to collect. While the court has already established that training AI on copyrighted material is legal under fair use—provided the material isn't pirated—the distribution of these funds is revealing a systemic breakdown in rights management.
According to TechCrunch, the settlement covers nearly 500,000 titles, with a payout of $3,000 per pirated work. The payment structure is binary: if a book is in print with a traditional publisher, the fee is split 50-50. If the book was self-published or the rights reverted to the author, the author takes 100%.
However, the execution of these payments has triggered a wave of disputes. TechCrunch reports that authors are receiving notices that publishers are claiming shares of payments for books that have long since reverted to the author. Mystery and thriller writer April Henry highlighted this friction on social media, questioning why HarperCollins claimed a book that reverted at least 17 years ago.
Writing for the blog Writers Beware, Victoria Strauss notes two primary categories of disputes: publishers claiming rights to reverted works, and publishers attempting to claim 100% of a payment when they are only entitled to 50%. While Strauss suggests these could be errors in recordkeeping, she argues the volume and consistency of the reports suggest something "more widespread and systemic" than routine glitches.
Interestingly, the dispute isn't limited to publishers. Strauss reports that some literary agencies are also attempting to claim a portion of the settlement, despite the fact that agents are not the rightsholders of the books they sell. This prompted a blunt reaction from author Courtney Milan (law professor Heidi Bond), who posted on Bluesky that agents should not be claiming percentages of the payout.
Not everyone views this as a coordinated effort to seize funds. Authors Guild CEO Mary Rasenberger told The New York Times that she does not believe publishers are "specifically trying to screw any author over," instead attributing the chaos to a confusing settlement process and poor recordkeeping.
From a technical standpoint, the dispute hinges on a specific cutoff: the "download date." Per TechCrunch, for an author to claim 100% of the payment, the rights reversion must have occurred before August 10, 2022.