It’s clear on its face that LLMs can and do store and reproduce copyrighted works; using a form of (somewhat) lossy data compression. And using a lossy stochastic or perceptual form of compression to reproduce a copyrighted work doesn’t somehow make it not storage or reproduction, otherwise sharing MP3 files wouldn’t be copyright infringement.

Anyone engaging in responsible risk management should assume that anything LLM-generated is infringing until determined otherwise by the courts, not the other way around.