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Microsoft’s AI boss thinks it’s perfectly OK to steal content if it’s on the open web
(www.theverge.com)
This is a most excellent place for technology news and articles.
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.
They absolutely are, unless it's covered by "fair use." A "derivative work" doesn't mean you created something that's inspired by a work, but that you've modified the the work and then distributed the modified version.