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Training Generative AI Models on Copyrighted Works Is Fair Use - Change My Mind
(mastodon.lawprofs.org)
This is a most excellent place for technology news and articles.
The prosecuting lawyer would argue the intent was in fact criminal and not fair use.
You can't just state "I had a fair use intent", you state your intent (e.g. selling an AI model that creates content for financial gain) and the court determines if that intent was criminal or fair use. And considering criminal copyright law is intended to prevent others from financially profiting from your work, this can be construed as criminal intent. So I would not be so sure that the criminal matter would be dropped so easily.
Of course in this specific case, there's a bit of a grey area, so the first case would not have criminal intent. But if ruled against the AI companies, subsequent cases could argue criminal intent as the AI companies should know by then that what they're doing isn't allowed.