"Much of the Kadrey ruling by Judge Vince Chhabria is dicta—meaning, the opinion spends many paragraphs on what it thinks could justify ruling in favor of the author plaintiffs, if only they had managed to present different facts (rather than pure speculation). The court then rules in Meta’s favor because the plaintiffs only offered speculation.
But it makes a number of errors along the way to the right outcome. At the top, the ruling broadly proclaims that training AI without buying a license to use each and every piece of copyrighted training material will be “illegal” in “most cases.” The court asserted that fair use usually won’t apply to AI training uses even though training is a “highly transformative” process, because of hypothetical “market dilution” scenarios where competition from AI-generated works could reduce the value of the books used to train the AI model..
That theory, in turn, depends on three mistaken premises. First, that the most important factor for determining fair use is whether the use might cause market harm. That’s not correct. Since its seminal 1994 opinion in Cambell v Acuff-Rose, the Supreme Court has been very clear that no single factor controls the fair use analysis.
Second, that an AI developer would typically seek to train a model entirely on a certain type of work, and then use that model to generate new works in the exact same genre, which would then compete with the works on which it was trained, such that the market for the original works is harmed. As the Kadrey ruling notes, there was no evidence that Llama was intended to to, or does, anything like that, nor will most LLMs for the exact reasons discussed in Bartz.
Third, as a matter of law, copyright doesn't prevent “market dilution” unless the new works are otherwise infringing. In fact, the whole purpose of copyright is to be an engine for new expression."
https://www.eff.org/deeplinks/2025/06/two-courts-rule-generative-ai-and-fair-use-one-gets-it-right
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