“Having copied the five billion images—without the consent of the original artists—Stable Diffusion relies on a mathematical process called diffusion to store compressed copies of these training images, which in turn are recombined to derive other images.”
This seems like it’s not an accurate description of what diffusion is doing. A diffusion model is not the same as compression. They’re implying that Stable Diffusion is taking the entire dataset and making it smaller then storing it. Instead, it’s just learning patterns about the art and replicating those patterns.
The “compression” they’re referring to is the latent space representation which is how Stable Diffusion avoids having to manipulate large images during computation. I mean you could call it a form of compression, but the actual training images aren’t stored using that latent space in the final model afaik. So it's not compressing every single image and storing it in the model.
This page says there were 5 billion images in the stable diffusion training dataset (albeit that may not be true as I see online it’s closer to the 2 billion mark). A Stable Diffusion model is about 5 gb. 5 gb / 5 billion is 1 byte per image. That’s impossible to fit an image in 1 byte. Obviously the claim about it storing compressed copies of the training data is not true. The size of the file comes from the weights in it, not because it’s storing “compressed copies”. In general, it seems this lawsuit is misrepresenting how Stable Diffusion works on a technical level.