Episode Details

Anthropic calls some AI distillation illicit. But is distillation illegal?

The answer may depend less on what you do with AI outputs than on how you accessed them.

This episode is a deep dive into how courts might rule. We cover X v. Bright Data, what OpenAI's and Anthropic's terms say about who owns AI outputs, why Anthropic's own fair use arguments could be turned against it and what the labs will likely do next.

Thank you to the presenting sponsor of this episode, Altitude. Visit altitude.xyz/law to learn more about their payments platform.

You'll hear from the three Variant co-authors of one of the sharpest papers on the topic:

• Daniel Barabander, investment partner and chief legal officer at Variant
• Sabina Beleuz, deputy general counsel at Variant
• Elijah Fox, investor at Variant

Read their article here: https://variant.fund/articles/license-distill-law-distillation-anthropic/.

Timestamps:

0:00 What is distillation?

1:52 Intro

3:01 Why distillation matters

5:44 X v. Bright Data

7:50 Access vs. selling

10:40 Copyright preemption

11:25 Why X doesn't own your posts

13:49 From scraping to distillation

16:12 Who owns AI outputs?

19:38 Is all distillation illicit?

24:10 Anthropic's fair use problem

25:05 Bartz v. Anthropic

26:42 Predictions

28:41 Distilling the distillers

29:21 Selling services, not tokens

32:34 Antitrust

37:06 Tech moves exponentially, law sublinearly

40:47 Humans, AI and personhood

45:15 Final thoughts

Thank you as well to the other sponsors of this episode: Cahill Gordon & Reindel, the Solana Policy Institute, the Hyperliquid Policy Center and the Decentralization Research Center.

To get in touch with the Cahill team about how any issues discussed in this episode apply to your situation, email mtomsky@cahill.com.

Disclaimer: This podcast is for informational and educational purposes only and does not constitute legal or investment advice. Views expressed by guests are their own and do not necessarily reflect those of their employers. Listening to this podcast does not create an attorney-client relationship.