Publishers Hit the AI Jackpot

When Anthropic said it would pay $1.5 billion to resolve the class-action lawsuit Bartz v. Anthropic, it was agreeing to the largest U.S. copyright settlement of all time. Each copyrighted title will be allotted $3,000, mostly split 50-50 between authors and publishers, with the first payment coming as soon as November. For publishing houses with thousands of titles, the not-insubstantial infusion of tech money is “a shot in the arm,” as one publishing professional puts it. “I don’t think anyone’s satisfied,” says a big-five editor, “but it was more money than I expected. It’s a lot of money.”

It was a different story for writers, many of whom, earlier this September, logged on to Anthropic’s online portal to check on their claims and were shocked to discover their publishers had filed for 100 percent of the cash. Others realized with dismay that their publishers had failed to register their books for copyright at all, making them ineligible, and that some out-of-print books were shown as being subject to the publisher-author split even though their ownership had long ago reverted to the person who wrote them. The mood was grim. “I knew the Anthropic settlement would get messy, but I’m in disbelief over the shakedowns happening with publishers, former agents, and others trying to get a bigger percentage (or any at all),” children’s writer Elizabeth Eulberg wrote on Threads. I asked author April Henry if she’s found it hard to reach her publishers, one of whom mistakenly filed for 100 percent. “I didn’t try. Who would I get in touch with?” she says. “They never really communicated with us.”

Publishing houses were quick to offer a mea culpa: Some had apparently assumed they would be responsible for paying out their authors individually, and a few, like Macmillan, have pledged to pay authors for titles they hadn’t copyrighted. To ease the communication gap, the big five all set up email accounts specifically for settlement-related questions. There were, it seems, a few bullies and fraudsters prowling around the margins. But for the most part, the discrepancies were errors that seem inevitable for a fast-moving case with more than 300,000 class-action members. It didn’t help that it was all taking place in a sometimes creaky industry that, after decades of consolidation, had a record-keeping problem. 

Co-claimants have 60 days to resolve their differences, as the Authors Guild put it; if the disagreements drag on, they will be assigned a c​​ourt-appointed special master who will decide who gets what. In the meantime, though, the 50-50 split means the industry is about to see a boost. Bloomsbury, the U.S. publisher of Sarah J. Maas and Harry Potter, had 14,087 titles in the settlement; that means its takeaway will be over $21 million, according to Publishers Weekly. (The company earned about $59 million in profit for its most recent fiscal year.) Steve Zacharius, the president of Kensington Publishing, a family-owned outfit that does mainly romance, told me he expects to net about $7.5 million before tax. “That’s a huge windfall,” he says. “It allows us to buy bigger books, to compete in bigger auctions, to pay down credit lines we have with banks.”

Massive big-five publishers are set to make much, much more. “It is very easy to imagine this being a windfall in excess of a hundred million dollars for a company like Penguin Random House,” says Chris Parris-Lamb, an agent at the Gernert Company. (PRH has not yet said how many titles it has in the settlement.) “I basically think it’s outrageous that publishers are getting 50 percent” — a “cash grab,” as he puts it, though he’s quick to clarify that he’s not saying they don’t need it. (The initial lawsuit was filed on behalf of authors, and it was the judge who pointed out that publishers should be brought under the tent.) There’s nothing in book contracts, Parris-Lamb says, that anticipates the scale of piracy that has happened: not just of one book or several books or even hundreds of books at one time but of almost every copyrighted title in their list. Because specific rules about AI training have not generally appeared in contracts, it was not a given, he thinks, that book companies would be legally entitled to a cut. “Publishers will try to claim that ‘Oh, it falls under a sublicense of electronic rights.’ Not to sound like Scalia or something, but an originalist reading of the contract would certainly put that into question,” he says. Fifteen percent would be more fair, he thinks — the same percentage agents generally take. 

Others are simply skeptical of how the industry plans to use the money. The novelist Alexandra Kleeman believes the money infusion will further tip the existing power imbalance between writers and their publishers. It’s “an excuse for the people controlling the money to give less money out, and to try to keep more, or to change the way that authors have been paid,” she says. 

The payout for authors, in comparison, seems less jackpot than “funds to put toward some dental work I’ve been meaning to get.” “Maybe at the end of this settlement, I get what, 2,000, 4,000 bucks?” says Adam Ross, who has a couple titles in the case. He writes big, award-winning literary books that take a long time to come together (“aspirationally great work,” as he calls it); he published his first novel, Mr. Peanut, in 2010, but his second, Playworld, only last year, too late to be included in the settlement. Even someone like Marie Force, a mostly self-published romance author who filed for 82 titles and is set to receive more than $200,000, thinks the trade-off is inadequate: “The value of our intellectual property is unlimited, and to have it taken in this way, there is some despair.” “I do have a furnace that needs replacing,” says historical romance author Courtney Milan, who filed titles in the “high 20s.” “But do I feel like it’s enough? Not really. Anthropic is talking about a $2 trillion IPO, and they’ve said they never would have been able to do it without pirating these works.”

Much of the discourse has centered on the injustice of LLMs being trained on work that it might then mimic, making human authors passé. “I felt like someone had reached into my chest and pulled my heart from my rib cage,” says Andrea Bartz, one of three named co-plaintiffs, who found her book The Last Night in a cache of pirated works used for AI training. “​​It sounds highfalutin for a hipster whodunit, but I really put a lot of myself into it.” (Her next novel, Delete Your Account, is about an author with writer’s block who AI-generates a thriller.) But not everyone is existentially terrorized by the idea of their words being used in this way: At least one author I know can’t imagine anyone would ask Claude to write a short story in their style anyway; they’re just happy to get a check. “I feel like many of these conversations are so overblown,” says Kleeman. “Maybe there are a couple of books that got bought and turned out to be partially AI generated or mostly AI generated, but we’re essentially in an artisanal craft where it doesn’t benefit readers to have more and more and more books.”

As a number of similar cases unfold, both authors and publishers seem to feel they are beginning the fight with an ambivalent victory. Bartz v. Anthropic is less a copyright case than a piracy case: The problem with what Anthropic did, Judge William Alsup said in his decision last year, was that the training cache was entirely pirated. Training large-language models on legally obtained titles, though — like the thousands of cheap used books Anthropic has been surreptitiously scanning even as the case wound down — would count as fair use, at least according to Alsup. Because the case didn’t reach the Supreme Court, it wasn’t a binding decision, but it did set a fragile and unsettling legal precedent. Unsealed files in Authors Guild v. OpenAI last week, a case that includes authors like Jonathan Franzen and John Grisham and has more of a chance of eventually heading to the Supreme Court, are making it clear that these companies were aware of their effect on the publishing industry specifically, not just incidentally: “our work in this area will make people unemployed,” the company’s policy director said. One OpenAI employee speculated that if George R.R. Martin died, “GPT-5 will autocomplete his series.”

The idea that readers would buy an AI-written Game of Thrones might seem to some like a tech-bro fantasy, but the sense of unpreparedness — that slow-moving publishers are no match for the smash-and-grab culture in Silicon Valley — has sent a chill through everyone working in books. “I really think people want human-made things,” says the big-five editor. “But it’s still nerve-racking. The industry has its head in the sand.”