There are only two strategies which are acceptable: either AI model output is completely illegal because of copyright stuff (this is unlikely to happen because there is now too much money behind it), or AI model output is fully in the public domain, which has its own problems but at least is an even playing field.
There won't be a middle ground that is safe. Because they want something that looks like a "middle ground", but really, all it does is lock in the big players' control over information, forever.