Artificial intelligence (AI) has rapidly become one of the most transformative technologies of the 21st century, reshaping industries from healthcare to entertainment. But behind the excitement lies a growing controversy over how AI companies are acquiring and using content to train their models. Specifically, many are using copyrighted material without permission, raising legal and ethical questions about whether this practice can be considered “fair use.” As AI-generated content floods the market, stakeholders—from artists to tech companies—are debating the implications of this practice and what it means for creators, companies, and the future of intellectual property.

The Unfolding Crisis: AI Training on Copyrighted Content

AI’s dependence on vast datasets to learn how to perform tasks like generating text, images, and videos has sparked concerns over how companies are acquiring that data. For instance, the viral AI video startup Viggle recently admitted to training its models on YouTube videos without explicit permission. Viggle is not alone. Major players such as NVIDIA and Anthropic are facing similar accusations.

https://twitter.com/ViggleAI/status/1832114003562394013

“YouTube’s CEO has called it a ‘clear violation’ of their terms,” explains Mike Kaput, Chief Content Officer at the Marketing AI Institute. “Yet most AI companies are doing it, betting on a simple strategy: Take copyrighted content, hope nobody notices, and if you succeed, hire lawyers.” This has become a common approach in the rapidly developing AI sector, as companies rush to build more powerful models, often without securing proper licenses.

The underlying issue is the use of copyrighted material—often created by individual content creators or large media companies—without any compensation or acknowledgment. In Kaput’s view, this strategy banks on the public’s indifference: “Most people see cool AI videos and think: ‘Wow, that’s amazing!’ They don’t ask: ‘Wait, how was this trained?’”

Is This Fair Use or a Copyright Violation?

The heart of the debate lies in how copyright law defines “fair use,” a legal doctrine that allows limited use of copyrighted material without permission, usually for purposes such as criticism, comment, news reporting, teaching, or research. But does AI training fall under this category?

“It hinges on a key distinction in copyright law: whether a work is transformative or derivative,” says Christopher Penn, Co-Founder and Chief Data Scientist at TrustInsights.ai. He explains that if AI-generated content is seen as transformative—meaning it adds new expression or meaning to the original work—it may be protected under fair use. However, if it is deemed derivative, merely replicating the original content, it could violate copyright laws.

“In the EU, regulators have said using copyrighted data for training without permission infringes on the copyright owner’s rights,” Penn continues. “In Japan and China, regulators have taken the opposite stance, saying the model is in no way the original work, and thus does not infringe.”

This leads to a critical question: Is the legal responsibility on the tool (the AI itself) or the user who generates content with it? “Only resolved court cases will tell,” Penn concludes.

The Public’s Indifference: Do People Care?

While the legal community is wrestling with these issues, the broader public seems largely disengaged from the debate. Justin C., co-founder of Neesh.AI, suggests that the average person is indifferent to AI’s data practices. “Most people feel like it’s out of their control,” he says. “They aren’t paying attention because it doesn’t directly affect them.” This lack of awareness means that AI companies have little fear of public backlash, as long as they continue delivering impressive products.

Similarly, Paul Guds, an AI management consultant, believes that the momentum behind AI development is too strong to stop. “The gains for the public outweigh the potential costs,” he argues. “Regulation on this matter will take years, and litigation will be costly and lengthy. In the end, this train cannot be stopped, worst case, it will be slowed down slightly.”

However, some believe this complacency could come with significant costs. “It feels a lot like Uber when it started,” says Melissa Kolbe, an AI and marketing strategist. “Just worry about the consequences later. The public doesn’t really care—unless it’s their own video.”

The Artistic Backlash: Protecting Creativity

While many in the tech community view AI as a tool for innovation, artists and creators feel differently. For them, the unchecked use of their work for AI training represents a threat to their livelihoods and the integrity of creative expression.

“The only people that really care about this are genuine artists,” says Jim Woolfe, an electronic musician. “The problem is that it’s become harder to tell the difference between real and generated content, and true creativity is in danger of being drowned out by bland, AI-generated art.” Woolfe predicts a backlash as more artists realize the scope of what’s at stake.

Others agree that AI could erode the value of original content. “It’s already harder to make a living as a creator,” says Reggie Johnson, a communication strategist. “Now, Big Tech companies are using copyrighted content to train AI without permission, and the government seems to be letting them get away with it.” Johnson points to the recent rejection of the Internet Archive’s appeal, a case that has sparked debate about whether AI companies are playing by a different set of rules than other industries.

Legal Implications: Can Copyright Law Keep Up?

The rapid pace of AI innovation is exposing gaps in current copyright laws. “Laws around copyright are already out of date,” says Doug V., a digital strategist. “With AI using content without permission or attribution, it’s a very complicated knot to unravel.” He anticipates that companies will begin inserting clauses into their terms and conditions, effectively requiring users to waive rights to their content for AI training purposes. “What artist will willingly upload their creations to social media if they’re effectively giving it all away for others to make derivatives of their work?” Doug asks.

This concern is echoed by Elizabeth Shaw, an AI strategy director, who suggests that the issue may soon become a hot topic in AI policy discussions. “Are we teasing an upcoming panel on this at MAICON?” she asks, referencing the Marketing Artificial Intelligence Conference.

The Future of AI and Copyright: What Comes Next?

As AI continues to evolve, the questions surrounding the use of copyrighted material will become more pressing. Some predict that regulation is inevitable, but it will take years to catch up. “I don’t think there’s a way to stop it,” Kaput admits. “Pandora’s box is already open.”

However, others believe the issue will come to a head sooner rather than later. “I predict a movement will rise that values real art over AI-generated content,” says Woolfe. “Once people realize what’s at stake, there will be a backlash.”

For now, the debate over whether AI companies can freely use copyrighted content for training remains unresolved. As courts begin to take on these cases, the line between fair use and infringement will continue to blur, leaving creators, companies, and lawmakers to grapple with the implications of AI’s rapid advancement.

In the meantime, it’s clear that AI is not just a technological innovation—it’s a legal and ethical minefield. As Guds puts it, “We’re trending toward falling off the slippery slope. The question is: how do we stop it?”