This week's music industry lawsuit against Anthropic adds yet another challenge to how AI firms train their large language models and offers a fresh reminder that generative AI remains a legal minefield, Axios' Megan Morrone and I report.

Why it matters: The decisions courts reach in cases like this will lay the groundwork for decades of law governing AI.

Driving the news: Universal Music Group and other major record labels sued Anthropic on Wednesday for using its AI tool to distribute copyrighted lyrics without a licensing deal. Anthropic did not respond immediately to our request for comment.

• The complaint focuses on OpenAI rival Anthropic's Claude 2, a chatbot that was released in beta in July.
• Last month Amazon announced a $4 billion investment in Anthropic, joining Google's $300 million stake.

Conflict over LLM inputs and outputs has been brewing for a while and this lawsuit mirrors similar efforts from writers and actors suing AI companies over use of their work.

• There are issues with both the way the engines are trained as well as the fact that, in some cases, they output content that reproduces part or all of a copyrighted work, Jason Peterson told Axios.
• Peterson is the CEO of GoDigital Media Group, a media and technology company focused on intellectual property rights management and claims to be one of the largest independent music copyright holders in the world.
• "This copying to storage for use in AI training is a likely clear-cut case of infringement, and the courts will put a stop to it," Peterson added in an email.

Zoom in: The record label claims against Anthropic, while similar to those made by writers and actors, could be easier to prove.

• "These claims are stronger," Katie Gardner, partner at the law firm Gunderson Dettmer, told Axios. "Plaintiffs have identified output that is substantially similar (and in some cases identical) to the copyrighted input, and there is already a robust market for licensing music lyric data," Gardner said in an email.
• "The brazen duplication of exact lyrics down to the letter is what sets it apart," says SoundExchange CEO Michael Huppe, who argues that artists should be entitled to the "three Cs" when it comes to AI use of their work: consent, credit and compensation.

The other side: AI companies are likely to argue that the training of their systems is fair use, with the AI systems simply scaling up the human knowledge process where people read up on existing information and use it to generate new ideas.

• "Advocates for generative AI would say it's the same thing," says Charlene Liu, a partner at the law firm Haynes Boone.
• However, there are key differences, especially when it comes to scale. "Generative AI is basically limitless," Liu said.
• Liu said it's tough to know how courts will rule. "There is not much existing law because everything is so new," she said.

Between the lines: There's a long record of music publishers having greater success defeating "fair use" claims for lyrics than for other kinds of intellectual property.

Our thought bubble: While the music business has become an early legal testbed for generative AI, the industry could also be one of the first to find a commercial path forward.

• The industry has a track record of finding ways to credit and compensate dozens of people who contribute to an album in different ways. And, in the post-Napster era, the industry has also been keen on embracing new technologies, such as music streaming.
• "AI is a fascinating technology and there are a lot of things it is going to do for the music industry," SoundExchange's Huppe told Axios. "Yes, there are these lawsuits out there; but the industry is also embracing AI."
• Some tech companies and music rights holders are exploring ways that AI can create content that wouldn't otherwise exist, such as an artist getting to collaborate with a musician that is no longer living.
• "I would say there is reason for optimism," Huppe said.

A Ukrainian company that used AI to re-create a deceased actor's voice for the video game expansion Cyberpunk 2077: Phantom Liberty says their technology can transform the field of voice acting without leaving humans out of the process, Axios' Stephen Totilo reports.

Why it matters: Advances in AI have alarmed voice actors who fear the technology could be used to eliminate their jobs.

• But Respeecher, the firm that worked on Cyberpunk, says AI is best used to modify human voices rather than replace them.

Driving the news: Respeecher's work for Cyberpunk 2077 re-creates the voice of actor Miłogost "Miłek" Reczek, who performed the Polish voiceover for supporting character Viktor Vektor in the 2020 video game. Reczek died in 2021 prior to the recording of voice work for 2077's expansion, released last month.

• "The new lines were performed by Janusz Zadura, who tried to emulate Miłek's style of speaking, after which we used Respeecher's algorithm to adjust these new recordings so that they emulated Miłek's voice," the game's localization director, Mikołaj Szwed, said in a statement to Axios.
• CDPR received permission to do this from Reczek's sons, the studio said, and it credits three "synthetic speech artists," who helped manipulate Zadura's voice, in the game.

What they're saying: Respeecher CEO Alex Serdiuk told Axios that Respeecher always ensures it has permission to use the voice its AI is trained on. (In the Cyberpunk case, the original actor's family was not paid. "Miłek's family didn't want any compensation, they treated it all as tribute to their late family member," a studio rep told Axios.)

• "You cannot tell text-to-speech exactly what emotion you need," Serdiuk says. The way he sees it, human actors, recording the lines that the AI can then manipulate, are essential to providing that emotion.

Mayors worldwide want to use generative AI in cities, from chatbots taking citizen concerns to visualizing urban planning, Axios DC's Cuneyt Dil reports.

Why it matters: Harnessing AI could help cities provide faster and more efficient services, but the road to adoption hasn't been tested and many Americans distrust the technology.

Driving the news: Mayor Muriel Bowser is meeting with more than 100 mayors at Bloomberg Philanthropies' three-day CityLab summit in Washington this week, where leaders tackle issues from public health to downtown recovery, and now AI.

• More than three quarters of 80 mayors surveyed by Bloomberg said they wanted to use AI in city management.

Yes, but: Hardly any are actually doing so. New York City is among the pioneers, after Mayor Eric Adams this week announced an AI plan.

The intrigue: At Wednesday's event, Bloomberg launched a new platform, City AI Connect, for city leaders to test and develop AI tools.

How it works: AI tools could track traffic patterns and help find solutions for congestion, for example.

• One of the biggest benefits could come through faster paperwork processing, which the private sector is beginning to use. Cities could benefit from AI helping speed up applications for driver's licenses or qualifying for housing vouchers.

What they're saying: "Its purpose is to strengthen the human effort necessary to manage and deploy generative artificial intelligence in city halls, not to replace it," the City AI Connect mission statement says.

• Jon Stewart is ending his Apple TV+ show over disagreements about topics Stewart planned to tackle, including AI and China. (New York Times)
• Venture capital firm Greycroft told investors this week that it will refocus its strategy around AI startups, according to a letter obtained by Axios' Dan Primack and Lucinda Shen. (Axios)

Well, this is one way to pass the time while stuck on the Eiffel Tower.