India, June 24 -- In a closely watched decision, a federal judge in San Francisco ruled late Monday that Anthropic's use of copyrighted books to train its artificial intelligence system qualifies as fair use under U.S. law, a major victory for the AI industry.

However, the court also found the company liable for copyright infringement over its storage of pirated books and ordered a trial to determine damages.

U.S. District Judge William Alsup concluded that Anthropic's use of works by authors Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson to train its Claude language model was "highly transformative" and aligned with copyright's goal of advancing creativity and innovation.

Alsup likened the AI's learning process to that of a rea...