Artificial intelligence (AI) is evolving at an incredibly rapid pace, bringing with it a changing set of opportunities and potential risks. The global rollout of agentic AI across business functions, including customer service, software development, finance, and corporate communications, presents critical risks related to piracy, errors, and workplace disruption.
In this three-part series, we examine these risks and provide strategies organizations can implement to respond to and mitigate these potentially costly liabilities.
Major AI firms in the U.S. and China have sourced their training data with few constraints. A shifting legal environment, with major lawsuits against Anthropic, Google, OpenAI, Meta, xAI, and Perplexity, for example, has marked a turning point in the use of copyrighted data. Amidst these growing legal battles, business users of AI platforms face an emerging threat as well.
A prominent class action lawsuit, Bartz v. Anthropic, was settled in late 2025 when Anthropic agreed to a $1.5 billion settlement payment, the largest in copyright history. The judge in this case found that Anthropic had acquired data through illegal means, downloading enormous shadow libraries that contain vast quantities of pirated books. In response to the complaint brought on behalf of publishers and authors whose works had been stolen, the judge ruled that creating a permanent library of pirated works was not fair use.
The firms providing shadow libraries, such as LibGen or PiLiMi, with no official headquarters, are associated with servers in places like Russia and the Netherlands. They themselves have been the target of legal actions in various countries, including Germany, Denmark, France, Russia, and the U.K., with numerous cases resulting in domain seizures.
Anthropic’s legal challenges continue, as several authors have opted out of the settlement and are pursuing a separate legal action that includes a broader set of AI companies. The lawsuit’s language is harsh:
“This case concerns a straightforward and deliberate act of theft that constitutes copyright infringement. Anthropic, Google, OpenAI, Meta, xAI, and Perplexity illegally copied vast quantities of copyrighted books without permission and then used those stolen copies to build and train their commercial large language models (‘LLMs’) and/or optimize their product.”
Meanwhile, Reddit has also sued Anthropic for unauthorized scraping of material from its site without licensing or payment. Reddit’s Chief Legal Officer stated, “We will not tolerate profit-seeking entities like Anthropic commercially exploiting Reddit content for billions of dollars without any return for redditors or respect for their privacy.”
Similar legal actions are mounting elsewhere. In addition to The New York Times’ lawsuit against OpenAI and Microsoft, they have filed a new suit against Perplexity for copyright infringement of their content. Regulators in other countries are piling on, with French fines against Google for breaching intellectual property agreements. Ironically, Anthropic itself has now accused Chinese AI firms DeepSeek, Moonshot, and MiniMax of intellectual property theft through the use of thousands of fake accounts to download massive quantities of information.
Companies that use AI-generated content, even if they are unaware that it has been pirated, can be held liable for materials alleged to infringe copyrights or be defamatory or inaccurate.
Not only organizations but their executives may also be charged: “In many cases, individual executives and decision-makers can face personal liability for AI-related legal violations, especially in cases involving willful misconduct or negligent oversight.” Attempts to shift blame by claiming that “AI did it” no longer serve as a valid defense.
This increasingly hazardous legal landscape makes it imperative for companies to take precautions when using AI to source content.
In addition to providing protection against possible legal hazards, these measures help companies ensure that the intellectual property their employees generate with AI support actually belongs to them.
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