#211 - Is AI Distillation Illegal?

<p>Anthropic calls some AI distillation illicit. But is distillation illegal?</p><p>The answer may depend less on what you do with AI outputs than on how you accessed them.</p><p>This episode is a deep dive into how courts might rule. We cover X v. Bright Data, what OpenAI&#39;s and Anthropic&#39;s terms say about who owns AI outputs, why Anthropic&#39;s own fair use arguments could be turned against it and what the labs will likely do next.</p><p>Thank you to the presenting sponsor of this episode, Altitude. Visit <a href="https://altitude.xyz/law" target="_blank" rel="ugc noopener noreferrer">altitude.xyz/law</a> to learn more about their payments platform.</p><p>You&#39;ll hear from the three Variant co-authors of one of the sharpest papers on the topic:</p><ul><li>Daniel Barabander, investment partner and chief legal officer at Variant</li><li>Sabina Beleuz, deputy general counsel at Variant</li><li>Elijah Fox, investor at Variant</li></ul><p>Read their article here: https://variant.fund/articles/license-distill-law-distillation-anthropic/. </p><p>Timestamps:</p><p>0:00 What is distillation?</p><p>1:52 Intro</p><p>3:01 Why distillation matters</p><p>5:44 X v. Bright Data</p><p>7:50 Access vs. selling</p><p>10:40 Copyright preemption</p><p>11:25 Why X doesn&#39;t own your posts</p><p>13:49 From scraping to distillation</p><p>16:12 Who owns AI outputs?</p><p>19:38 Is all distillation illicit?</p><p>24:10 Anthropic&#39;s fair use problem</p><p>25:05 Bartz v. Anthropic</p><p>26:42 Predictions</p><p>28:41 Distilling the distillers</p><p>29:21 Selling services, not tokens</p><p>32:34 Antitrust</p><p>37:06 Tech moves exponentially, law sublinearly</p><p>40:47 Humans, AI and personhood</p><p>45:15 Final thoughts</p><p>Thank you as well to the other sponsors of this episode: Cahill Gordon &amp; Reindel, the Solana Policy Institute, the Hyperliquid Policy Center and the Decentralization Research Center.</p><p>To get in touch with the Cahill team about how any issues discussed in this episode apply to your situation, email mtomsky@cahill.com.</p><p><em>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.</em></p>