I Shredded Millions of Books to Build Claude: The Truth Behind Anthropic Project Panama

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$1.5 Billion Settlement, Millions Destroyed: Key Takeaways

  • Anthropic purchased, disassembled, scanned, and destroyed millions of books for Claude training
  • Internal document: “Project Panama is our effort to destructively scan books from around the world”
  • $1.5 billion settlement, approximately $3,000 per book paid to authors

What Happened?

Over 4,000 pages of court documents were released, revealing Anthropic’s secret project. The codename was “Project Panama.” Internal planning documents explicitly state: “Project Panama is our effort to destructively scan books from around the world.” They bulk-purchased tens of thousands of books from used bookstores like Better World Books and World of Books. They cleanly cut off the spines using “hydraulic cutters.” They scanned the pages with high-speed, high-quality scanners. And recycling companies collected the remaining debris.[Techmeme]

This project was led by Tom Turvey. He’s a former Google executive who created the Google Books project 20 years ago. Over about a year, Anthropic invested millions of dollars to acquire and scan millions of books.[Futurism]

Why Is This Important?

Honestly, this reveals the reality of how AI training data is acquired.

Why did Anthropic choose this approach? First, to avoid the risks of illegal downloads. Second, buying used books and disposing of them as desired was likely legal under the “first sale doctrine.” The judge actually recognized this scanning method itself as fair use.[CNBC]

However, there was a problem. Before Project Panama, Anthropic had freely downloaded over 7 million books from illegal sites like Library Genesis and Pirate Library Mirror. The judge ruled that this portion could constitute copyright infringement.[NPR]

Personally, I think this is the core issue. The problem isn’t scanning “legitimately” purchased books to destroy them—it’s that they first illegally downloaded them. Anthropic itself was aware of this. Internal documents explicitly state: “We don’t want this work to be known.” Will there be consequences?

The $1.5 billion settlement is the largest in AI copyright dispute history. Approximately $3,000 per book goes to authors for about 500,000 books.[PBS]

AI has set other precedents. The impact on companies is significant. OpenAI, Google, and Meta also face similar lawsuits. The standard has become clear: “Buying books and scanning them is fine, but illegal downloads are not permitted.”

Anthropic is already embroiled in a music copyright lawsuit. A separate lawsuit was filed in January, with music publishers claiming that Claude 4.5 was trained to “memorize” copyrighted works. Watchdog]

Frequently Asked Questions

Q: How many books were actually usable in Project Panama? Were they destroyed?

A: According to court documents, up to 2 million books were targeted for “destructive scanning.” Anthropic purchased tens of thousands of books from used bookstores like Better World Books and World of Books, and it’s estimated they processed millions of books over about a year, investing millions of dollars.

Q: How much will authors receive?

A: The $1.5 billion settlement applies to approximately 500,000 books. That’s about $3,000 per book. Authors of illegally downloaded books are eligible to file claims, and once the settlement is approved by the court, they can file individually. However, if not all authors file claims, the actual amount received may increase.

Q: Is it legal to buy books and scan them?

A: The judge recognized this method as fair use. This is because, under the “first sale doctrine,” purchased books can be disposed of as desired. However, Anthropic’s problem was that they downloaded books from illegal sites before Project Panama. Scanning legally purchased books is currently legal.

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References

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