Good luck suing the coming open source decentralized models. There will be pages and pages of models on torrent trackers in the very near future.
Since AI can’t hold copyright, it can’t make money, thus what, exactly, are the damages?
You're talking as if weak AI is sentient and performing the act itself. The damages are from actual people and/or companies involved in the act of distributing derivative works from copyrighted material using forward diffusion, gradient descent, and other techniques.