You can quote a work under fair use, and if it's legal depends on your intent. You have to be quoting it for such uses as "commentary, criticism, news reporting, and scholarly reports."

There is no cheat code here. There is no loophole that LLMs can slide on through. The output of LLMs is illegal. The training of LLMs without consent is probably illegal.

The industry knows that its activity is illegal and it strategy is not to win but rather to make litigation expensive, complex and slow through such tactics as:

1. Diffusion of responsibility: (note the companies compiling the list of training works, gathering those works, training on those works and prompting the generation of output are all intentionally different entities). The strategy is that each entity can claim "I was only doing X, the actual infringement is when that guy over there did Y".
2. Diffusion of infringement: so many works are being infringed that it becomes difficult, especially on the output side, to say who has been infringed and who has standing. What's more, even in clear cut cases like, for instance, when I give an LLM a prompt and it regurgitates some nontrivial recognizable copyrighted work, the LLM trainer will say you caused the infringement with your prompt! (see point 1)
3. Pretending to be academic in nature so they could wrap themselves in the thick blanket of affirmative defense that fair use doctrine affords the academy, and then after the training portion of the infringement has occurred (insisting that was fair use because it was being used in an academic context) "whoopseeing" it into a commercial product.
4. Just being super cagey about the details of the training sets that were actually used and how they were used. This kind of stuff is discoverable but you have to get to discovery first.
5. and finally magic brain box arguments. These is typically some variation of "all artists have influences." It is a rhetorical argument that would be blown right past in court, but it muddies the public discussion and is useful to them in that way.

Their purpose is not to win. It's to slow everything down, and limit the number of people who are being infringed who have the resources to pursue them. The goal is that if they can get LLMs to "take over" quickly then they can become, you know, too big and too powerful to be shut down even after the inevitable adverse rulings. It's classic "ask for forgiveness, not permission" silicon valley strategy.

Sam Altman's goal in creeping around Washington is to try to get laws changed to carve out exceptions for exactly the types of stuff he is already doing. And it is just the same thing SBF was doing when he was creeping around Washington trying to get a law that would declare his securitized ponzi tokens to be commodities.

It doesn’t definitively prove openAI didn’t pay for the works.

But since they are a business/org and has all of those works and using them for profit. Then it kind of would be provable if openAI did or didn't pay the correct licenses as they and/or the publisher/Stephen King (if he directly were to handle those agreements) would have a receipt/license document of some kind to show it. I don't agree with how copyrights are done and agree that things should be public domain much sooner. But a for-profit thing like openAI shouldn't be just allowed to have all these exceptions that avoids needing any level of permission and paying for ones that ask for it to use it. At least not while us regular people that aren't using these sources for profits/business also aren't allowed to just use whatever we want.

The only way that (I at least) see such an open use of everything at the level of all the data/information being fine is in a socialist/communist system of some kind. As the main concern for generally keeping stuff like entertainment/information/art/etc at a creator level is to have money to live in modern society where basic and crucial needs (food/housing/healthcare/etc) costs money. So for the average author/writer/artist/inventor a for-profit company just being able to take their shit and much more directly impact their ability to live.

It is a highly predatory level of capitalism and should not have exceptions. It is just setting up a different version of the shit that needs to also be stopped in the entertainment/technology industries. Where the actual creators/performers/etc are fucked by the studios/labs/corps by not being paid anywhere near the value being brought in and may not have control over it. So all of the companies and the capitalist system are why a private entity/business/org shouldn't just be allowed to pull this shit.