OpenAI and Anthropic are considering tapping investor funds to settle AI-related lawsuits in lieu of insurers who won’t fully cover AI risks, the Financial Times reported.
A series of authors and The New York Times are suing the ChatGPT maker over copyright infringement in what could amount to billions of dollars in damages. It is also facing a lawsuit by the family of a teen who died by suicide after claims he was using ChatGPT. The company has secured some coverage for emerging AI risks from insurer Aon. The report cited disputing coverage figures, though as much as $300 million could be insured — far less than the possible payouts required by OpenAI. Meanwhile, the company has raised $60 billion from investors.
A California judge has preliminarily approved for Anthropic to pay $1.5 billion to authors, some of which will come from its own funds, according to the FT. The company has raised $32 billion to date.
The discussions reveal a gap in traditional insurers’ ability to provide sufficient capacity for the scale and risks of AI companies. The situation echoes earlier difficulties insurers had in pricing risk for cyber threats in the 2010s, which lacked historical context and led to massive losses. Insurance firms largely adapted — raising premiums, narrowing coverage, and utilizing data-driven risk models. While the potential damages are likely higher in AI, the cyber case offers a roadmap for insurance companies as they adapt to a new industry.