Seems to me the training of AI is not radically different than compression algorithms building up a dictionary and compressing data.
Yet nobody calls JPEG compression “transformative”.
Could one do lossy compression over billions of copyrighted images to “train” a dictionary?
(not legal advice)
Transformative works are necessarily derivative, but that transformation allows for a legal claim to "fair use" regardless of making a derived work.
An llm is looking at the shape of words and ideas over scale and using that to provide answers.
The only difference, really, is we know how a JPEG algorithm works. If I wanted to, I could painstakingly make a jpeg by hand. We don't know how LLMs work.