It is now clear that SD is treading on thin ice: training on watermarked and copyrighted images without their author's permission, then attempting to commercialize it even when the model emits images that resemble a high similarity of the original training data including watermarks or copyrighted images: (Mickey Mouse, Getty Images watermarks, Bloodborne art cover, etc).
This weakens their fair use argument, especially with Getty Images also threatening to sue SD for the same reason. If OpenAI was able to get permission to train on shutterstock images [1], then SD could have done the same, but chose not to.
Perhaps SD thought they could get away with it and launch their grift (DreamStudio) on digital images and artists. It turns out that now SD creates an opt-out system afterwards but artists can already find out if their images are in the training set. [2].
[0] https://arxiv.org/pdf/2212.03860.pdf
[1] https://www.prnewswire.com/news-releases/shutterstock-partne...