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Anthropic has reached an out-of-court settlement with a group of authors who sued the company over its use of more than seven million books downloaded from shadow libraries to train its AI models. The plaintiffs accused Anthropic of using copyrighted works without permission to train its language models. After a federal judge allowed the case to proceed as a class action in July, Anthropic said it was under existential pressure, citing potential damages in the billions. The settlement was disclosed on August 26, 2025, in a San Francisco court. Anthropic still faces other lawsuits, including cases brought by music publishers and Reddit.

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Brave discovered a security flaw in Perplexity’s AI browser Comet that allows for so-called indirect prompt injection attacks. In these attacks, malicious commands are hidden in web pages or comments and are then interpreted by the AI assistant as legitimate user instructions when summarizing a page. During testing, Brave showed that Comet could be tricked into reading out sensitive user data, like email addresses and one-time passwords, and sending them to attackers. Perplexity responded by issuing updates, but according to Brave, the issue still isn’t fully resolved. Brave also offers its own AI assistant, Leo, in its browser and faces similar security challenges.

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Dynamics Lab has launched Mirage 2, the latest version of its generative game world engine. With Mirage 2, users can upload their own images - like sketches or photos - and turn them into interactive game worlds. The engine also lets players change the game in real time by typing in commands. Worlds can be saved and shared. While Mirage 2 makes clear technical gains over its predecessor, it still struggles with precise controls and visual stability. In both areas, Genie 3 from Google DeepMind is far ahead, but Genie 3 isn't available yet and likely requires much more computing power. A Mirage 2 demo is available online.

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