In Kadrey v. Meta (court case) a group of authors sued Meta/Anthropic for copyright infringement but the case was thrown out by the judge because they couldn't actually produce any evidence of infringement beyond, "Look! This passage is similar." They asked for more time so they could keep trying thousands (millions?) of different prompts until they finally got one that matched enough that they might have some real evidence.

In Getty Images v. Stability AI (UK), the court threw out the case for the same reason: It was determined that even though it was possible to generate an image similar to something owned by Getty, that didn't meet the legal definition of infringement.

Basically, the courts ruled in both cases, "AI models are not just lossy/lousy compression."

IMHO: What we really need a ruling on is, "who is responsible?" When an AI model does output something that violate someone's copyright, is it the owner/creator of the model that's at fault or the person that instructed it to do so? Even then, does generating something for an individual even count as "distribution" under the law? I mean, I don't think it does because to me that's just like using a copier to copy a book. Anyone can do that (legally) for any book they own, but if they start selling/distributing that copy, then they're violating copyright.

Even then, there's differences between distributing an AI model that people can use on their PCs (like Stable Diffusion) VS using an AI service to do the same thing. Just because the model can be used for infringement should be meaningless because anything (e.g. a computer, Photoshop, etc) can be used for infringement. The actual act of infringement needs to be something someone does by distributing the work.

You know what? Copyright law is way too fucking complicated, LOL!