https://en.wikipedia.org/wiki/Fair_use

Fair use only works if what you create is to reflect on the original and not to supercede it. For example if ChatGPT gobbled up a work on the reproduction of firefies, if you ask it a question about the topic and it just answers, that’s not fair use since you made the original material redundant. If it did what a search engine would do and just tell you that “here’s where you can find it, you might have to pay for it”, that’s fair use. This is of course US law, so it may be different everywhere, and US law is weird so the courts may say anything.

That’s the gist of it, fair use is fine as long as you are only creating new information and only use the copyrighted old work as is absolutely necessary for your new information to make sense, and even then, you can’t use so much of the copyrighted work that it takes away from the value of it.

Otherwise if I pirated a movie and put subtitles on it, I could argue it’s fair use since it’s new information and transformative. If I released the subtitles separately, that would be a strong argument for fair use. If I included a 10 sec clip in it to show my customers what the thing is like in action, then that may be argued. If it’s the pivotal 10 seconds that spoils the whole movie, that’s not fair use, since I took away from the value of the original.

ChatGPT ate up all of these authors’ works and for some, it may take away from the value they have created. It’s telling that OpenAI is trying to be shifty about it as well. If they had a strong argument, they’d want to settle it as soon as possibe as this is a big stormcloud on their company IP value. And yeah it sucks that people created something that may turn out to not be legal because some people have a right to profit from some pieces of capital assets, but that’s the story of the world the past 50 years.