https://arstechnica.com/tech-policy/2025/08/authors-celebrate-historic-settlement-coming-soon-in-anthropic-class-action/

“If every author in the class filed a claim, industry advocates warned, it would "financially ruin" the entire AI industry.

It's unclear if the class certification prompted the settlement or what terms authors agreed to, but according to court filings, the settlement terms are binding. A lawyer representing authors, Justin A. Nelson, told Ars that more details would be revealed soon, and he confirmed that the suing authors are claiming a win for possibly millions of class members.“

I saw something recently that claimed a significant part of construction $$ has been on AI infrastructure, so there’s a big bubble that could pop here

Would a company settle a lawsuit that would bankrupt them? If they lose they’re likely ruined, so I’m guessing a settlement would allow them to continue operating, if they think they can raise the money to keep going. Otherwise why settle? Is there some downside to losing as opposed to settling, if both destroy the company?

I suspect that there could be multiple things going on here. I suspect many AI companies would want to avoid discovery to protect technologies that even after a bankruptcy they might exploit somehow. It could also affect total debt (especially if punitive damages are awarded) and perhaps there are differences in how these things are organized in a bankruptcy.

But these are only wild guesses.