> I don't think training on copyrighted stuff will be ever banned, but we need to figure out how much they can be allowed to generate based on that.
From a US copyright law point of view, this is most likely correct. Copyright law doesn't prevent you from ingesting copyrighted works, it prevents you from distributing them.
There is also a great deal of existing case law about how different a work has to be before it's not infringing from another work anymore. There are existing rules of thumb judges go by when trying to determine if infringement occurred. They include things like the amount of difference in expression, the quantity, whether or not it's incidental, etc.
And that's not even getting into the question of fair use -- which is a whole other kettle of fish.
I suspect that the courts will deal with these issues the way that they've always dealt with these issues: on a case-by-case basis.