For image generation, it's obviously all fiction. Which is fine and mostly harmless if you you know what you're getting. It's going to leak out onto the Internet, though, and there will be photos that get passed around as real.
For text, it's all fiction too, but this isn't obvious to everyone because sometimes it's based on true facts. There's often not going to be an obvious place where the facts stop and the fiction starts.
The raw Internet is going to turn into a mountain of this stuff. Authenticating information is going to become a lot more important.