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Valve appear to be not willing to publish games with AI generated content
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Is this just AI art? Or if you had AI npcs or something like that would it also be blocked?
It's solely about legal issues if your AI has been trained on unlicensed data (Midjourney, Playground AI, etc.). We don't really have laws that handle these cases yet, so valve wants to err on the save side.
Everything else is still allowed. Even AI generated content is still allowed if it's trained on your own (or licensed) data.
And that's pretty clearly how it should be.