IMO this doesn't really capture fully what AI is or does. It is possible to use AI to create artwork that has never been seen before and that is not derivative of an artist that already exists. I've used it myself for my own photos and drawings. It understands the basics of art like composition, lighting, the physics of things to some extent and all of this it uses in the art it creates.

The problem is that copyrighted material is intermingled with non-copyrighted material in a way where it's not obvious how to solve it. But I think in this case, AI is so powerful that we should (gasp) cut it some slack. This would be the perfect example of throwing the baby out with the bathwater if OpenAI were to be sued into oblivion.