I wouldn't be surprised if lawyers/courts/lawmakers determine that current generative AI are on the "infringing" rather than the "inventive" side of things.
I think there is potential for this to change as AI gets better:
https://kitsunesoftware.wordpress.com/2022/10/09/an-end-to-c...
Does it really matter? Once you embed copyrighted works into your learning dataset, any model you ship and any "creation" of that model is by definition a derived work, must have a license from the original authors and must obey the terms of that license. The extent of derivation is immaterial.
The AI crowd is on a hard collision course with an army of gavels.
The theory used here though is that fair use permits transformative use. Normally copilot output should be sufficiently transformative. This particular situation appears to be a sort of bug (overfit).
Note that AI models already work somewhat similarly to how humans work (becoming bug-for-bug compatible at times even :-P ). We may need laws to be amended in the opposite direction even, else it might become illegal for humans to learn too.
Of course everything a human learns and produces is a derivative of real world input, some of it copyrighted. But people agreed that this transformation is a form of fair use, as long as the derived work is sufficiently creative - where the key implicit assumption is that creativity is a human ability that warrants protection. Both the creator and the learner enjoy protection because they are human.
In the AI case, the output of a program will certainly not receive protection by default - it will be protected only as a consequence of its human creator or user rights. It doesn't really matter how transformative and analogous to the human mind the program is, the output only deserves protection solely for its unique human created parts - the internal working and the extent of the craft embedded in a GPT3 text prompt. The first is unrelated directly to the work produced, and the second is laughable vs the artworks embedded in the model.
If in the future AI advances to the point where it can be granted natural rights, this could change, but we are far far from that point.
Animals have (some, limited) natural rights, but can't hold copyright. Corporations don't have "natural" rights but can hold copyright.
If you have code under a restrictive license but we acquire it and use it privately for our own needs in trade secret processes how would you even know?
And if that isn't good enough, I'm sure the copyright holders can lobby for whatever to make it easier to find, and they'll only be thwarted in this if the governments are convinced that the interests of the lobbyists are no longer aligned with the government's interests.
Copyright doesn't, for sure.
You play privately, but you have absolutely no right to copy and redistribute the work to the masses, or even do whatever you please with it.
Not so with a piece of code that you use privately.