Thousands of authors demand payment from AI companies for use of copyrighted works

You're getting lost in the weeds here and completely misunderstanding both copyright law and the technology used here.

First of all, copyright law does not care about the algorithms used and how well they map what a human mind does. That's irrelevant. There's nothing in particular about copyright that applies only to humans but not to machines. Either a work is transformative or it isn't. Either it's derivative of it isn't.

What AI is doing is incorporating individual works into a much, much larger corpus of writing style and idioms. If a LLM sees an idiom used a handful of times, it might start using it where the context fits. If a human sees an idiom used a handful of times, they might do the same. That's true regardless of algorithm and there's certainly nothing in copyright or common sense that separates one from another. If I read enough Hunter S Thompson, I might start writing like him. If you feed an LLM enough of the same, it might too.

Where copyright comes into play is in whether the new work produced is derivative or transformative. If an entity writes and publishes a sequel to The Road, Cormac McCarthy's estate is owed some money. If an entity writes and publishes something vaguely (or even directly) inspired by McCarthy's writing, no money is owed. How that work came to be (algorithms or human flesh) is completely immaterial.

So it's really, really hard to make the case that there's any direct copyright infringement here. Absorbing material and incorporating it into future works is what the act of reading is.

The problem is that as a consumer, if I buy a book for $12, I'm fairly limited in how much use I can get out of it. I can only buy and read so many books in my lifetime, and I can only produce so much content. The same is not true for an LLM, so there is a case that Congress should charge them differently for using copyrighted works, but the idea that OpenAI should have to go to each author and negotiate each book would really just shut the whole project down. (And no, it wouldn't be directly negotiated with publishers, as authors often retain the rights to deny or approve licensure).