>An AI product - more specifically, the model weights - is a derivative work of the original works used for training; AI training is a process of algorithmic compression of the originals.
I'm not so sure this is as obvious a conclusion as you think. Imagine for a moment an AI OCR program. If one goes to their local library and scans all the books there to generate the models used to OCR text, does that make the OCR model and application derivative works of the books? Does copyright give Tolkien's estate the right to prevent the distribution of AI based OCR if a published copy of The Hobbit was used in creating the model? Certainly with the right inputs, the model can be used to generate a verbatim copy of the work it was trained on, but is that sufficient to say that your OCR model is just an "algorithmic compression" of these books?
I'm not so sure this is as obvious a conclusion as you think. Imagine for a moment an AI OCR program. If one goes to their local library and scans all the books there to generate the models used to OCR text, does that make the OCR model and application derivative works of the books? Does copyright give Tolkien's estate the right to prevent the distribution of AI based OCR if a published copy of The Hobbit was used in creating the model? Certainly with the right inputs, the model can be used to generate a verbatim copy of the work it was trained on, but is that sufficient to say that your OCR model is just an "algorithmic compression" of these books?