OpenAI and Anthropic explore investor funds to settle copyright lawsuits
OpenAI and Anthropic are reportedly exploring the use of investor funds to settle potential multibillion-dollar lawsuits filed by copyright owners alleging unauthorized use of their material to train AI systems. Insurance coverage falls far short of potential losses, with OpenAI considering self-insurance mechanisms and Anthropic using its own funds for settlements.
What happened
Copyright owners have launched a series of high-stakes lawsuits against tech firms including OpenAI, Microsoft, and Meta Platforms, alleging unauthorized use of their material to train AI systems.
OpenAI, which has tapped Aon, secured coverage of up to $300 million for emerging AI risks, though another person disputed this figure claiming it was significantly lower. OpenAI has considered 'self-insurance' by setting aside investor funding and establishing a 'captive,' a ringfenced insurance vehicle used by large companies to manage emerging risks.
A federal judge in California preliminarily approved a landmark $1.5 billion settlement of a copyright class action brought by a group of authors against Anthropic. Anthropic is partly using its own funds to cover potential settlements.
Reported impact
Insurance coverage falls far short of what is needed to protect against potential losses from a series of multibillion-dollar legal claims.
Index analysis
Kevin Kalinich, head of cyber risk at Aon, stated that the insurance sector broadly lacks 'enough capacity for (model) providers.'
Classification
Sources and evidence
Sources not yet published
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