Earlier quoted context omitted.
> then surely a model distilling another model is transformative and fair use. Yes it is, in the legal/copyright sense of fair use. That's why they ban it in their TOS. Which customers agree to when signing up for the service.
So far, we have one ruling that says "model distillation by vendor A from vendor B with the intent to use the results to compete with vendor B in vendor B's domain is not fair use". Which makes a degree of sense. It's possible that distillation for other reasons, with no intent to harm the vendor you distill from, would have been ruled to be fair use. But in law, intent matters.
What was the intent of the original ai companies (anthropic, OpenAI, etc) when they mass-distilled the entire internet to create their training data set?