Copyright law has its limitations. But it also has a long history of being applied and interpreted that you can't just wish away. New legal interpretations have to be reconciled with that. So, any radical changes in that are not very likely to happen. Nor will politicians step up and change the law. First of all, few of them actually care or even understand most of this stuff. And secondly, they have plenty of other distractions and a worse attention span than a toddler. Mostly they just do what big companies tell them to do.
So, the most likely outcome here is that these cases won't get very far. At best it might drag on for a few years while nothing really changes. During that time, AI will continue to develop and will get more embedded in society.
And lets face it, this is not Oracle with really deep pockets unleashing an army of lawyers against the likes of Google but some isolated individuals. As legal cost ramps up, their enthusiasm might suffer a bit. Especially if they start losing cases.