When I generate AI art I do so by forming a mental conception of what sort of image I want and then giving the AI instructions about what sort of image I want it to produce. Sometimes those instructions are fairly high-level, such as "a mouse wearing a hat", and other times the instructions are very exacting and can take the form of an existing image or sketch with an accompanying description of how I'd like the AI to interpret it. When I'm doing inpainting I may select a particular area of a source image and tell the AI "building on fire" to have it put a flaming building in that spot, for example.

To me this seems very similar to photography, except I'm using my prompts and other inputs to aim a camera at places in a latent space that contains all possible images. I would expect that the legal situation will eventually shake out along that line.

This particular lawsuit is about someone trying to assign the copyright for a photo to the camera that took it, which is just kind of silly on its face and not very relevant. Cameras can't hold copyrights under any circumstances.