Have you read the recent SCOTUS decision in Warhol v Goldsmith? Because that's a pretty major redefinition of transformative for the purposes of fair use, and not in a good way for arguing that generative AI is fair use, especially because it ties transformative to the market impact. That generative AI is generally creating outputs that are directly competing with inputs (particularly in the case of generating images, where it's clearly competing with stock images) would make it dramatically less likely that a court would find that it is in fact transformative.