The interesting question is just who will be liable for the copyright violation: The party that hosts the AI service? The party that trained it on copyrighted images? The user entering a prompt? The (possibly different) user publishing the resulting image?
I think AI companies are working hard on preventing generated images from being similar to training images unless the user very explicitly asks the result to look like some well known image/character.
Is selling colored pencils that can draw images of Mickey a copyright violation?
The way I see it, the tool can't ever be at fault for its use, unless its sole use (or something close enough to its sole use) is to infringe in copyright.
Besides, the safeguarding of copyright isn't the single variable we as a society should be solving for. General global productivity is way more valuable than guaranteeing Disney's bottom line.
Even then, you could look at a tape recorder or a photocopier and one of their primary uses is to make a copy of a copyrighted work.
The question isn't "can it be used for" but rather "does it have valid non-infringing use" and "when it does infringe, is it the person who uses the tool or the tool that is at fault?"
That is certainly not clear, unless its only purpose was to do that.
I don't think that courts have ruled on that specifically (yet), but I seriously doubt that it would be. Taking the image of Mickey and distributing it would certainly be, though.
A photocopier can generate images of Mickey. Does that make a photocopier illegal?
That stance is clearly not supported by copyright law.
If, however, we're talking about copyright violations applying to the distribution of works generated by AI, that's an entirely different conversation. It's still not really clear-cut, but there are ways that could be in violation of copyright law.
It isn't the case that AI is being treated differently, though. The issues would be the same if a human were doing all of this stuff.
Are tattoo artists breaking the law by creating tattoos of copyrighted material? I think they are. And if an artist becomes really popular for their mickey mouse tattoos, then they will provably be noticed by Disney and there will be consequences.
I don't think this is going to be hard for courts. If you borrow your friends copy of a copyright text, got to kinkos and duplicate it, then distribute the results - you are the one violating copyright, not your friend or kinkos.
The same will hold here I think, mutatis mutandis. This is all completely separable from the training issue.
When Disney did their copyright extension last time, they had bipartisan influence.
Now Disney is in the middle of the culture war, and there is no Republican that will risk being primaried to support Disney.
Given that you de facto need 60 votes in the Senate, it is not happening.
the same is true for artwork.