An original composition based on a statistical analysis of the training data. Statistical data about a copyrighted work obviously isn't necessarily a derivative of that work. Otherwise Tolkien could sue me for telling you how many times The Lord of the Rings uses the word "the".
If you trained an LLM repeatedly on nothing but the text of LOTR until it could re-produce the books verbatim and then tried to sell copies of that LLM, then I agree that would be blatent copyright infringement, yes.
The industry is banking on Author's Guild v. Google to be precedent in such a way that it's functionally transformative enough to be a completely new work.
