> Implied in the fair use argument is that it is a derivative work.
You can get all LLMs to spit out almost exact copies of known IP visuals from movies and games. For instance, with Dalle-E and Midjourney, it's relatively easy to get similar pictures from film and game studios. Those are copies with minor changes. It would be hard to argue otherwise in court. The same happens with ChatGPT spitting out verbatim passages from New York Times articles.
