Class action against Stability AI, Midjourney, DeviantArt

Summary

This case involves 5 key legal issues related to AI copyright and training data usage.

Analysis Date: 2026-01-02

What's Next

Discovery ongoing.

Possible Outcomes

Plaintiff (Plaintiff) wins
If the plaintiffs win, it would set a significant precedent on the use of copyrighted works for AI training, particularly regarding the transformative use doctrine. The court could rule that AI-generated outputs resembling original works do not qualify as transformative, undermining the defendants' fair use defense [12, 19]. This could lead to substantial damages for the defendants, potentially in the billions, as artists seek compensation for unauthorized use [3, 7]. Additionally, the ruling may impose new operational requirements on AI companies, necessitating stricter licensing agreements and clearer disclosures about training data sources [16, 20]. The economic implications could reshape the AI industry, increasing operational costs as companies allocate funds for creator compensation and compliance with copyright laws [12, 16]. However, unresolved questions remain about the application of fair use in commercial contexts and jurisdictional issues affecting enforcement against international entities [14, 19].
Defendant (Defendant) wins
Should the defendants prevail, it would reinforce the argument that AI training constitutes fair use, particularly if the court finds that the outputs are sufficiently transformative [11, 19]. This outcome could lead to a dismissal of the plaintiffs' claims, allowing AI companies to continue their current practices without significant operational changes. The ruling may also limit the scope of damages, potentially reducing the financial burden on defendants and allowing them to allocate resources towards further development rather than legal compliance [4, 19]. However, this would likely exacerbate the economic disparity between AI companies and content creators, as artists may continue to see their works exploited without compensation [12, 16]. The unresolved legal questions surrounding the definition of fair use in commercial contexts and the implications of DMCA violations would remain critical, as they could influence future litigation and regulatory frameworks [14, 19].

Source Articles

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