Uncertain and overly restrictive copyright regimes undermine the foundations of the AI industry

2. “Copyright Poisoning”: Uncertainty of Provenance, Litigation Risks of Creation, and Economic Risks for Industries The ambiguous legal status of GAI models that train on copyrighted works establishes an unstable foundation for other industries considering embracing this new technology, primarily due to potential litigation risks. This situation can be likened to a form of ‘copyright poisoning,’156 where the uncertainty of introducing one potentially risky asset spreads and taints everything it comes into contact with. For example, a GAI-generated character in a video game or cloned voices might compromise the whole creative work and halt the release or distribution of said game. Concerned not only with legal risks but also public backlash, many gaming publishers and developers have taken a strong stance against the use of GAI, either through blanket bans157 or restrictive policies for development.158 Further down the road, the increase in GAI outputs and difficulty of proving or policing “chain of provenance” requirements might create an uncertain landscape for creative industries, introducing high risks of litigation and economic costs (e.g., high insurance costs).159 Paradoxically, GAI is a vital technology for the present and future of video games and the metaverse,160 which explains why some major players have advocated for more permissive policies.161 And it is not just big players, the provenance problem also affects individual creators, who might be subjected to the impossible task of proving that they have not been assisted by AI.162 Like the serpent eating its own tail, the overreach of copyright law could end up carrying the seed of its own irrelevance, cannibalizing and paralyzing[undermining] creative industries through high risks of litigation that would thwart copyright law’s founding purpose—resulting in what I refer to as a sort of “ouroboros copyright.” 3. Copyright Litigation Stifles Competition, Providing a Moat for Big AI Major companies are so heavily invested in advancing GAI that they are willing to grant users immunity by assuming responsibility for potential copyright liability,163 or integrate “copyright shields” as part of their business strategy.164 Given how expensive copyright infringement and associated litigation can be, only those with big pockets can provide copyright immunity, creating a marketing moat that prevents new competitors from gaining entry. The stifling of competition is also aided by the reality that it is extremely expensive to train foundational models. And after training, there is the potential risk that companies may exploit copyright legal strategies to prevent others from accessing those models, cementing their competitive advantages.165 As we have witnessed how the Internet landscape has become dominated by a few powerful players, we must pay attention to those players’ present race to develop AI as a way to perpetuate their dominant position. And notably, copyright law can serve as a powerful tool for those players to achieve their goal.