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Anthropic reaches $1.5 Billion settlement with authors in landmark copyright case

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Anthropic has agreed to a $1.5 billion settlement with authors in a landmark copyright case, marking one of the first and largest legal payouts of the AI era.

The AI startup agreed to pay authors around $3,000 per book for roughly 500,000 works, after it was accused of downloading millions of pirated texts from shadow libraries to train its large language model, Claude. As part of the deal, Anthropic will also destroy data it was accused of illegally acquiring.

The fast-growing AI startup announced earlier this week that it had just raised an additional $13 billion in new venture capital funding in a deal that valued the company at $183 billion. It has also said that it is currently on pace to generate at least $5 billion in revenues over the next 12 months. The settlement would amounts to nearly a third of that figure or more than a tenth of the new funding it just received.

While the settlement does not establish a legal precedent, experts said it will likely serve as an anchor figure for the amount other major AI companies will need to pay if they hope to settle similar copyright infringement lawsuits. For instance, a number of authors are suing Meta for using their books without permission. As part of that lawsuit, Meta was forced to disclose internal company emails that suggest it knowingly used a library of pirated books called LibGen—which is one of the same libraries that Anthropic used. OpenAI and its partner Microsoft are also facing a number of copyright infringement cases, including one filed by the Author’s Guild.

Aparna Sridhar, deputy general counsel at Anthropic, told Fortune in a statement: “In June, the District Court issued a landmark ruling on AI development and copyright law, finding that Anthropic’s approach to training AI models constitutes fair use. Today’s settlement, if approved, will resolve the plaintiffs’ remaining legacy claims. We remain committed to developing safe AI systems that help people and organizations extend their capabilities, advance scientific discovery, and solve complex problems.”

A lawyer for the authors who sued Anthropic said the settlement would have far-reaching impacts.
“This landmark settlement far surpasses any other known copyright recovery. It is the first of its kind in the AI era. It will provide meaningful compensation for each class work and sets a precedent requiring AI companies to pay copyright owners,”  Justin Nelson, partner with Susman Godfrey LLP and co-lead plaintiffs’ counsel on Bartz et al. v. Anthropic PBC, said in a statement. “This settlement sends a powerful message to AI companies and creators alike that taking copyrighted works from these pirate websites is wrong.”

The case, which was originally set to go to trial in December, could have exposed Anthropic to damages of up to $1 trillion if the court found that the company willfully violated copyright law. Santa Clara law professor Ed Lee said could that if Anthropic lost the trial, it could have “at least the potential for business-ending liability.” Anthropic essentially concurred with Lee’s conclusion, writing in a court filing that it felt “inordinate pressure” to settle the case given the size of the potential damages.

The jeopardy Anthropic faced hinged on the means it had used to obtain the copyrighted books, rather than the fact that they had used the books to train AI without the explicit permission of the copyright holders. In July, U.S. District Court Judge William Alsup, ruled that using copyrighted books to create an AI model constituted “fair use” for which no specific license was required. But Alsup then focused on the allegation that Anthropic had used digital libraries of pirated books for at least some of the data it fed its AI models, rather than purchasing copies of the books legally. The judge suggested in a decision allowing the case to go to trial that he was inclined to view this as copyright infringement no matter what Anthropic did with the pirated libraries.

By settling the case, Anthropic has sidestepped an existential risk to its business. However, the settlement is significantly higher than some legal experts were predicting. The motion is now seeking preliminary approval of what’s claimed to be “the largest publicly reported copyright recovery in history.”

James Grimmelmann, a law professor at Cornell Law School and Cornell Tech, called it a “modest settlement.”

“It doesn’t try to resolve all of the copyright issues around generative AI. Instead, it’s focused on what Judge Alsup thought was the one egregiously wrongful thing that Anthropic did: download books in bulk from shadow libraries rather than buying copies and scanning them itself. The payment is substantial, but not so big as to threaten Anthropic’s viability or competitive position,” he told Fortune.

He said that the settlement helps establish that AI companies need to acquire their training data legitimately, but does not answer other copyright questions facing AI companies, such as what they need to do to prevent their generative AI models from producing outputs that infringe copyright. In several cases still pending against AI companies—including a case The New York Times has filed against OpenAI and a case that movie studio Warner Brothers filed just this week against Midjourney, a firm that makes AI that can generate images and videos—the copyright holders allege the AI models produced outputs that were identical or substantially similar to copyrighted works.

“The recent Warner Bros. suit against Midjourney, for example, focuses on how Midjourney can be used to produce images of DC superheroes and other copyrighted characters,” Grimmelmann said.

While legal experts say the amount is manageable for a firm the size of Anthropic, Luke McDonagh, an associate professor of law at LSE, said the case may have a downstream impact on smaller AI companies if it does set a business precedent for similar claims.

“The figure of $1.5 billion, as the overall amount of the settlement, indicates the kind of level that could resolve some of the other AI copyright cases. It could also point the way forward for licensing of copyright works for AI training,” he told Fortune. This kind of sum—$3,000 per work—is manageable for a firm valued as highly as Anthropic and the other large AI firms. It may be less so for smaller firms.”

A business precedent for other AI firms

Cecilia Ziniti, a lawyer and founder of legal AI company GC AI, said the settlement was a “Napster to iTunes” moment for AI.

“This settlement marks the beginning of a necessary evolution toward a legitimate, market-based licensing scheme for training data,” she said. She added the settlement could mark the “start of a more mature, sustainable ecosystem where creators are compensated, much like how the music industry adapted to digital distribution.”

Ziniti also noted the size of the settlement may force the rest of the industry to get more serious about licensing copyrighted works.

“The argument that it’s too difficult to track and pay for training data is a red herring because we have enough deals at this point to show it can be done,” she said, pointing to deals that news publications, including Axel Springer and Vox, have entered into with OpenAI. “This settlement will push other AI companies to the negotiating table and accelerate the creation of a true marketplace for data, likely involving API authentications and revenue-sharing models.”

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The rise of on-demand leadership in the AI economy

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A quiet but consequential shift is underway in the executive labor market. Companies are rethinking how they access senior judgment in the AI era. 

Rather than defaulting to full-time executive roles that command lofty salaries and long-term overhead, companies are increasingly turning to experienced consultants, strategists, and advisors to provide leadership on a limited and targeted basis.

This is not a dilution of leadership, but a recalibration of where experience delivers the most value.

According to LinkedIn’s latest Jobs on the Rise report, the fastest-growing roles in the U.S. economy sit at the intersection of AI and strategy. AI engineers claimed the top spot, while AI consultants and strategists ranked No. 2 overall. Strategic advisors and consultants also placed in the top 10. Together, the data show that as execution becomes cheaper, human judgment becomes more valuable.

The underlying driver is the implementation gap. After years of AI experimentation, organizations are struggling to convert tools into returns. While they do not lack models or software, many lack orchestration. Companies are increasingly turning to AI consultants and strategists to align technology with business realities, governance, and incentives, work that requires credibility, cross-functional fluency, and the kind of judgment typically associated with senior leadership roles.

The labor market now reflects a clear division of labor. Demand is rising simultaneously for full-time technical AI talent and for senior professionals who can translate those capabilities into business outcomes. As companies scale internal AI teams, they are increasingly relying on external advisors and consultants to provide the judgment required to direct that work at critical moments.

The supply side of this shift is shaped by organizational reality. Executives continue to make daily decisions, but AI has concentrated risk into fewer, more complex, and higher-impact choices around operating models, capital allocation, and governance. Rather than expanding permanent headcount, companies are bringing in experienced external leaders to guide those decisions when the stakes are highest.

The economics reinforce the model. Although senior advisors and consultants often command higher hourly rates, their total annual cost is typically a fraction of a comparable full-time executive role because they are engaged for a limited scope and time. Just as important, this approach allows organizations to draw on multiple forms of expertise rather than binding themselves to a single permanent hire.

The talent profile filling these roles is equally telling. Many of these advisors are former founders, CEOs, and COOs. Experience functions as a filter. LinkedIn’s data shows that many of the fastest-growing strategic roles carry a median of eight or more years of experience. These are not entry-level positions, but mid- or second-act careers for professionals with deep industry context.

The rise of founders and independent consultants on the Jobs on the Rise list also signals that this shift is driven by talent behavior, not just employer demand. Senior professionals are increasingly opting for career paths that offer autonomy, variety, and the opportunity to leverage their skills rather than committing to a single organization in an uncertain environment.

As AI automates and cheapens execution, the market value of human judgment, strategy, and accountability rises. As a result, pricing power shifts from doing the work to deciding what work should be done and how it should scale.

In this environment, experience is the moat. What is often described as “fractional leadership” is better understood as the unbundling of executive judgment from full-time roles. Over time, this model is likely to become not a stopgap but a structural response to the redistribution of value, risk, and expertise in the AI economy.

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Trump finds a ‘solution’ to Greenland crisis, backs off on 10% tariff threats

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President Donald Trump seems to have found a “solution” to the Greenland crisis following talks with NATO leadership on Wednesday. He said he will back away from the threat to impose 10% tariffs on eight European allies — an announcement that had sparked a mass sell-off on Tuesday — that were set to take effect on Feb. 1.

The reversal came only hours after Trump walked back an earlier threat to use force to secure Greenland during his World Economic Forum speech in Davos, Switzerland.

“We have formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region,” Trump wrote on Truth Social, adding that the plan would be “a great one for the United States of America, and all NATO Nations.” He said the tariffs would be shelved “based upon this understanding.”

The announcement followed a meeting with NATO Secretary General Mark Rutte, who has been seeking to defuse growing tensions between Washington and its European allies as Trump escalated rhetoric over Greenland’s strategic importance. Trump also said on Truth Social that additional discussions were underway concerning what he called the “Golden Dome” initiative related to Greenland, without providing details.

Markets reacted sharply to the apparent de-escalation. The S&P 500 rose 1.5% in afternoon trading, while long-term U.S. Treasury yields fell, signaling investor relief after days of volatility. Despite this pullback potentially confirming yet another instance of the “TACO trade,” or “Trump Always Chickens Out,” major questions remain over the substance of the framework. 

Trump has repeatedly said that anything less than controlling all of Greenland is “unacceptable.” It’s unclear, and seems unlikely, that the outline discussed with NATO leadership satisfies that particular condition, given that Denmark reiterated that it would not give up Greenland’s sovereignty after Trump’s speech on Wednesday. 

In his Truth Social post, Trump said Vice President JD Vance, Secretary of State Marco Rubio, and Special Envoy Steve Witkoff would lead negotiations going forward and report directly to him.The announcement also comes after the EU suspended trade negotiations with the U.S. and suspended the trade agreement they have had in place since August. CATO scholar Kyle Handley, in a statement provided to Fortune, wrote that the suspension should have never been seen as a “dramatic breakdown,” because “there was never a real deal to begin with.”

“What’s unraveling now was a fragile, politically convenient set of press releases that papered over fundamental disagreements and was always vulnerable to executive-level tariff threats.”



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Trump says Europe does one thing right: drug prices

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President Donald Trump told an audience of thousands of executives and global leaders at the World Economic Forum that European countries have taken a turn for the worse. Trump said his friends who visit the continent tell him they don’t recognize the region—and “not in a positive way.”

“I love Europe, and I want to see Europe go good,” Trump said on Wednesday at the Davos, Switzerland, meeting. “But it’s not heading in the right direction.”

But the president conceded that Europe is doing one thing better: keeping its drug prices low. 

“A pill that costs $10 in London costs $130. Think—it costs $10 in London, costs $130 in New York or in Los Angeles,” he said to murmurs from the crowd. 

Europe may not be recognizable to Trump’s friends, but Trump said he has other friends returning from London, remarking on the affordability of medication there. Indeed, a 2024 Rand study found that across all drugs, U.S. customers paid on average 2.78 times higher prices than in 33 other countries, including France, Germany, and the United Kingdom, in 2022.

The president has adopted a “most favored nation” policy meant to both lower drug costs for Americans while pushing other countries to pay more. Trump made a concerted effort in his second term to address astronomical drug costs, including minting a deal with 17 pharmaceutical companies to slash U.S. prices to match medication costs overseas. The move followed a sweeping executive order issued in May to introduce the most-favored-nation policy. On Wednesday, Trump alluded to an executive order he signed last week, pledging to lower drug prices by up to 90%.

Fallout with France

Trump said pharma companies did not initially believe countries would be willing to change prices. Trump noted in his remarks that he first approached French President Emmanuel Macron about increasing drug prices, but Macron refused.

“I said, ‘Emmanuel, you’re going to have to lift the price of that pill,” Trump said.

Trump said that threatening a 25% tariff on French goods, including wines and champagne, sealed the deal. Macron’s office disputed Trump’s assertion that he pressured the French president into lowering drug prices. 

“It’s being claimed that President @EmmanuelMacron increased the price of medicines. He does not set their prices. They are regulated by the social security system and have, in fact, remained stable,” Macron’s office said in an X post. “Anyone who has set foot in a French pharmacy knows this.”

Included in the post was a gif of Trump with animated “Fake news!” text overlaid on the image.

Health policy experts say drug prices in the U.S. are so high because of a system structured differently from other countries that allow companies to negotiate with individual insurance companies or pharmacy benefit managers, giving them more leverage to raise prices than in other countries’ systems, where there is one regulatory agency negotiating drug prices for a population.

Efficacy of Trump’s efforts to lower drug costs

Industry leaders think Trump’s efforts to lower drug costs could pay off. Vas Narasimhan, CEO of pharmaceutical giant Novartis, told Fortune’s Jeremy Kahn at a USA House session in Davos on Wednesday that Trump identified a valid issue in the high cost of U.S. drugs.

About two-thirds of new drugs on the market over the last decade have come from the U.S., a result of its highly developed research and development (R&D) infrastructure. Some argue that other countries benefit from U.S. innovation without paying their fair share to support the industry’s growth.

“When you look at what underpins R&D in our industry, it’s been primarily in the United States,” Narasimhan said. “The United States is the source of more than half the profits of the industry, and without the United States, you wouldn’t have all of these innovations, all these incredible medicines.”

Narasimham emphasized the need for a “more balanced approach” to funding R&D, implying that other countries should pay more for U.S.-produced pharmaceuticals. He pointed to Trump’s deal with the 17 drug companies as a “reasonable” solution.

Early signs, however, suggest drug prices have not come down. A January report from drug price research firm 46brooklyn found drug companies, including 16 firms with which Trump made deals since September, raised drug prices for at least some of their drugs in the first two weeks of 2026. The median increase of the 872 brand-name drugs with hiked prices was about 4%, the same rate as the year before.

Reuters similarly reported earlier this month, citing data from 3 Axis Advisors, that those 17 drug companies had raised the prices of 350 medications. Public health experts attributed the rise to the behind-the-scenes nature of the deals between drug companies and insurers.

“These deals are being announced as transformative when, in fact, they really just nibble around the margins in terms of what is really driving high prices for prescription drugs in the U.S.,” Dr. Benjamin Rome, a health policy researcher at Brigham and Women’s Hospital in Boston, told the outlet.

The Department of Health and Human Services did not immediately respond to Fortune’s request for comment.



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