Their defense seems to be that AI requires crime to exist, so they should be allowed to do crime. This is not a defense permitted in any body of law. They're going to need to work on that.
The problem with AI industry is that they took the scientific exception intended for the betterment of mankind and then tried to turn that into a profit model. Many if their base models are borderline legal, but using those for making money requires some kind of regulation or deal.
I expect this to get resolved by having mandatory AI royalty fees that are added to every AI subscription, to be handed out to the creative industry. It's how my country and a few others responded when tape made it possible to record songs from the radio. It'll satisfy the huge companies (because they'll be paid more the more works they have) and spit in the face of smaller creatives or mere hobbyists.
It'll cost a couple of billion to grease the wheels, but if these companies work the same way the cryptocurrency industry paid off the Trump campaign, it won't be a difficult problem to solve.