So what? It's a future where software can be created on demand with the push of a button. Why care about some dinky little Free Software tool getting abused when everybody can rewrite it from scratch in an instant?
> Another possibility is the one others sketched, where truly user-controlled models are legislated away.
Even that isn't going to stop people from just paying a few dollar and writing whatever software they want or releasing it under Free Software license.
> Do we really believe that Rockstar would be ok with someone feeding GTA6 to a hypothetical LLM and get a "free" reimplementation out?
They can't stop you from feeding a few photos of Miami into the AI and instructing it to make a game with gangsters and car theft out of it. Astra can already one-shot a GTA1-style game, give it another year and they might be able to do GTA3 and sooner or later they'll work their way up to GTA6. All of this will happen in a time frame much shorter than what it took to go from GTA5 to GTA6 the old way.
> my bets are on "complete and utter stomping of small IP rights holders in favor of giant ones".
Of course small IP holders will be stomped on, but not because of copyright, but simply because their IP is worthless now. AI is making creation so easy that there will a oversupply of everything. With the budget of a single big Hollywood blockbuster you can make around 1000 full length AI movies at current prices. When there is 1000x as much stuff out there, it's just going a lot harder to stand out. And cost is only going to go down.