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An LLM can essentially reproduce a work, and the whole point is to generate derivative works. So by its very nature, it runs into copyright issues.
Derivative works are not copyright infringement. If LLMs are spitting out exact copies, or near-enough-to-exact copies, that’s one thing. But as you said, the whole point is to generate derivative works.
There’s a great episode of The Dollop about the Segway guy. 565 - Dean Kamen and It.