The general argument (IANAL) is that it's Fair Use, in the same vein as Google Images or Internet Archive scraping and storing text/images. Especially since the outputs of generated images are not 1:1 to their source inputs, so it could be argued that it's a unique derivative work. The current lawsuits against Stability AI are testing that, although I am skeptical they'll succeed (one of the lawsuits argues that Stable Diffusion is just "lossy compression" which is factually and technically wrong).
There is an irony, however, that many of the AI art haters tend to draw fanart of IP they don't own. And if Fair Use protections are weakened, their livelihood would be hurt far more than those of AI artists.
The Copilot case/lawsuit IMO is stronger because the associated code output is a) provably verbatim and b) often has explicit licensing and therefore intent on its usage.