If it generates verbatim output, then we have a good old copyright violation, which courts could latch onto for standing.

But if I hire people to write books in the style of Stephen King and then train an AI with them, where's King's recourse?

And the AI could be trained on public domain data and still be a competitor to authors. It seems like the plaintiffs would have to be equally against this usage if they're worried about their jobs.

But in those two cases, I don't think any laws are broken.

I just think, aside from a plain old piracy violation, it's going to be a tricky one in court. Sure you can't just copy the book, but running a copy of a book through an algorithm is tougher to ban, and it's not something that necessarily should be illegal.