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Not sure how that would negate the fair use defence.

If they're using pirated books, haven't they already committed copyright infringement by keeping these copies? The model itself might be transformative, but I think that is a separate issue.

If the companies had bought all of the ebooks, then they might be in the clear.

But even given that, does that transfer on to the AI model itself?

Or is it "you did a bad thing in the process of making another thing but we can only punish the initial act"

The question is can you stop it from blatantly offering up a copy of some ones work?

Yes you can create a transformative work but if you can get it to make an exact copy and can't get it to stop doing that I would say there's a problem.

if your a service provider and I send you a DCMA request how do you handle it?

Have you tried to get an AI to create a direct copy of something of any substantial length?

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