If you're going to write an exposé about one of Silicon Valley's biggest frauds, you probably develop strong feelings about people taking your work without asking. John Carreyrou, the New York Times investigative reporter who wrote "Bad Blood" about the Theranos scandal, filed a federal lawsuit Monday accusing basically every major AI company of doing exactly that with his book and those of other authors.
The Complaint Against AI's Biggest Names
Carreyrou sued OpenAI, Alphabet Inc.'s (GOOGL) Google (GOOG), Meta Platforms, Inc. (META), Elon Musk's xAI, Anthropic and AI search startup Perplexity in California federal court. He's joined by five other writers: Lisa Barretta, Philip Shishkin, Jane Adams, Mathew Sacks and Michael Kochin. Their claim is straightforward: these companies copied their copyrighted books without consent to train the large language models powering today's generative AI tools.
For Carreyrou, that means his detailed account of Elizabeth Holmes and the Theranos fraud allegedly ended up as training data for chatbots, with no permission and no payment.
Why This Lawsuit Looks Different
Here's where things get interesting. Unlike most pending AI copyright lawsuits, these plaintiffs explicitly rejected class-action status. That's unusual, and it's strategic.
The complaint argues that class-action settlements allow AI companies to resolve thousands of alleged copyright infringements at massive discounts. "Plaintiffs desire to retain full control of their case and avoid having their rights diluted by being swept into sprawling class-action settlements structured to resolve claims for pennies on the dollar," the filing states.
In other words, they're betting they'll do better fighting individually than getting lumped into a giant settlement where everyone gets a small check.
Taking Aim At The Anthropic Settlement
The lawsuit specifically calls out Anthropic's August settlement as an example of what they're trying to avoid. The AI startup behind Claude agreed to pay $1.5 billion to settle a class-action lawsuit from authors who accused it of using their books without authorization.
Sounds like a lot of money, right? According to this new complaint, authors in that case will receive only a tiny fraction of the maximum statutory damages allowed under U.S. copyright law. "The danger is not hypothetical," the filing says, adding that "these pending class actions and proposed settlement(s) seem to serve Defendants, not creators."
It's a pointed criticism: even a billion-dollar settlement looks small when you divide it among thousands of plaintiffs and compare it to what each could theoretically win individually.
The Billion-Dollar AI Landscape
The companies being sued aren't exactly hurting for cash. OpenAI is reportedly negotiating a funding round that could raise up to $100 billion and potentially value the ChatGPT creator at as much as $830 billion, according to The Wall Street Journal. Earlier reports from The Information estimated OpenAI's valuation at around $750 billion. Back in October, the company was valued at roughly $500 billion in a secondary market transaction.
Anthropic, despite that $1.5 billion settlement, is reportedly planning an IPO as early as 2026 and exploring a funding round that could push its valuation above $300 billion.
In September, Perplexity raised $200 million at a $20 billion valuation. The AI-driven search startup competes with Google by delivering conversational answers to queries.
Reports last month indicated that Musk's xAI is in advanced talks to raise $15 billion, potentially valuing the company at $230 billion.
As for the tech giants, Alphabet currently has a market capitalization of $3.7 trillion, while Meta has a market cap of $1.6 trillion.
When you're suing companies with valuations like these, it makes sense to maximize your potential recovery rather than settle collectively for what might amount to pocket change.