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From my understanding, unless ChatGPT spits out the copyrighted work, they don’t have a case here.
Using copyrighted works to train an LLM which can then generate similar works seems pretty solidly to be fair use.
I am not a lawyer though.
I respectively disagree there. If a writer didn't give any concent whatsoever to give an A.I. a copy of their written works for an A.I. to train or base anything on. I think it's a fair case of theft. Theoretically, someone would be able ask an A.I. to recite an entire book for them. Without ever having to pay its author any contribution.
(I think you're arguing from an ethical standpoint whereas OP was arguing legally, but anyway....)
No, that shouldn't happen. If an AI were ever able to recite back its training data verbatim, that AI would be overfitting. It happens by accident sometimes early on in development when your training data is too small and your model is too big, but it's an error, and is something to be avoided and corrected.
The whole point of training is to get it to a point where it can't recite back any of its training data. In order for that to happen, the AI is forced to sort of generalize and abstract (sorry for anthropomorphizing) its training data. That's the only way to get it to be able to generate something new, which is the whole point of the endeavour.
Long story short, if an AI could recite back an entire book, by definition it could not be an AI, and it wouldn't resemble any of the popular LLMs we have now like ChatGPT. (But you may see snippets and pastiches and watermarks show up)