Contrast LLM-created code which is certainly a substitute for the original copyrighted work.
Really? When has this been done?
Only if it’s sufficiently transformative. There was recently a case that hit the US Supreme Court about this subject regarding an Andy Warhol adaptation of a portrait of Prince [1]. So, in the US, fair use in this regard requires some amount of substantive transformation of the material. But, as we are talking about AI algorithms, there isn’t a person in between the model and the training data. The argument here is whether or not a person is required to make a transformative use of the material (and thus fair use applies). Given that AI generated (and non-human animal generated) works aren’t copyrightable due to the lack of human involvement, I’d wager that any AI use of copyrighted material won’t get fair use protections.
[1] https://www.eff.org/deeplinks/2023/05/what-supreme-courts-de...
That's true it's probably 99% plus it happening or at-least that's the conclusion that the experts and lawyers hired to help evaluate AI startup valuations are coming too. Hired by banks, venture funds, short selling shops, etc plenty of people who don't depending on it being ok to make money.
> "yes we're using copyrighted works, but we're doing it at scale and blending it, so that's ok"
I mean you know collages are legal right? You literally take 100s of copyrighted pictures and put them together and suddenly it's perfectly legal and ok.