As much as I agree with the conclusion (my AGPL code was stolen by OpenAI, as was a lot of other code), your logic is extreme. This is not good. A more reasoned argument is more convincing.
1. "Fair use"
It is fair use to use snippets of my code in other projects. AGPL doesn't change that. If I have a 3-line sort routine, and Copilot copies that verbatim, it's okay.
The place and reason Copilot is not okay is because I can ask it to spit out code which, in some versions, was almost verbatim code I wrote, and in others, a paraphrase. The same abstractions and high-level design I invented is copied by GPT.
It's like writing a book set in the Star Trek universe and (not as a parody), changing "Spock" to "Spork" and "Kirk" to "Dirk."
It's a problem for me because I compete with commercial systems, and chose the AGPL for very specific reasons: People have a right to know how their data is analyzed, and AGPL preserves that. Copilot allows companies to quickly replicate and whitewash my code.
If Microsoft uses a snippet in Windows -- e.g. a small use in an unrelated context, fair use clearly allows that. As much as I don't want my code stolen, degrading fair use would be the far greater evil.
2. "The reason why OpenAI has a non-profit part is to allow them to claim that they do non-profit research, which fair-use doctrine requires to work."
No, OpenAI was set up as a genuine, if ill-formed, non-profit. When it clearly became big $$$, bad people (likely breaking the law) formed a for-profit arm to personally profit from it. The non-profit arm is there for historical reasons.
Your statement is false, and there is ample historical record that what you're stating is not how it happened.
That's dangerous, since the wrong lessons would be drawn. The lesson this reiterates, which I learned many times the hard way, is that for non-profits, checks-and-balances matter. If you don't want your non-profit going south, this means everything -- licenses, corporate charter, bylaws, contracts, etc. -- need to be properly structured to act as a permanent network of checks-and-balances so the organization cannot go south even if bad people are involved, and that incentives are structured to support good behavior.
We do need a for-profit like the original OpenAI, but properly structured and resourced.