You should check out this article by Kit Walsh, a senior staff attorney at the EFF. The EFF is a digital rights group who recently won a historic case: border guards now need a warrant to search your phone.

Mainly:

First, copyright law doesn’t prevent you from making factual observations about a work or copying the facts embodied in a work (this is called the “idea/expression distinction”). Rather, copyright forbids you from copying the work’s creative expression in a way that could substitute for the original, and from making “derivative works” when those works copy too much creative expression from the original.

Second, even if a person makes a copy or a derivative work, the use is not infringing if it is a “fair use.” Whether a use is fair depends on a number of factors, including the purpose of the use, the nature of the original work, how much is used, and potential harm to the market for the original work.

and

Even if a court concludes that a model is a derivative work under copyright law, creating the model is likely a lawful fair use. Fair use protects reverse engineering, indexing for search engines, and other forms of analysis that create new knowledge about works or bodies of works. Here, the fact that the model is used to create new works weighs in favor of fair use as does the fact that the model consists of original analysis of the training images in comparison with one another.

And Valve has officially taken the opposite side of what you said, Valve will now allow the vast majority of games AI-generated content on Steam where it didn’t before.

That’s not what Valve’s policy said at all. It basically says you have to promise you aren’t infringing and disclose how it’s used so customers can make their own decisions.

https://steamcommunity.com/groups/steamworks/announcements/detail/3862463747997849619

It’s basically the most conservative fence-sitting position they could have picked.

I didn’t say I was certain - just pretty sure :P That was based on what was known last year, dunno if news on that have been updated yet. I’m bound to see it on Lemmy when it does. Thank for letting me know though.