The Supreme Court hasn’t ruled on a software case like this, as far as I know. But given the recent 7-2 decision against Andy Warhol’s estate for his copying of photographs of Prince, this doesn’t seem like a Court that’s ready to say copying terabytes of unlicensed material for a commercial purpose is OK.
I’m going to guess this ends with Congress setting up some kind of clearinghouse for copyrighted training material: You opt in to be included, you get fees from OpenAI when they use what you added. This isn’t unprecedented: Congress set up special rules and processes for things like music recordings repeatedly over the years.
https://scholarship.law.edu/cgi/viewcontent.cgi?referer=&htt...
“Write a review of this short story: …” – probably fine.
“Rewrite this short story to have a happier ending: …” – probably not.
That being said, it doesn’t take a lot of effort to differentiate these cases. Google was indexing copyrighted works and providing access to limited extracts. They weren’t transforming them into new works and then selling access to those new works over APIs.
Imagine OpenAI had invented a software program that turned any written text into an animated cartoon enacting the text. That would obviously be creating a derivative work and outside fair use bounds. That they mix a bunch of works (copyrighted and otherwise) into a piece of software doesn’t allow them to escape that basic analysis.
Google showed a “clip” of the original work, no different in scope than Siskel & Ebert showing a clip of a film as they reviewed it. The uses are not comparable.