If you take all the words from Harry Potter and shuffle the words together in a random order, the output will be distinct but the work as a whole is probably st

If you take all the words from Harry Potter and shuffle the words together in a random order, the output will be distinct but the work as a whole is probably still derivative. If you do that for 500 book series, you still haven't generated a new work, you've simply created a legal morass of derivative copyrights. ChatGPT is just a really impressive word-blender. All of those "sufficiently distinct" snippets are in a meaningful sense recombinations of other copyrighted snippets it was trained on. When you're in a very sparse part of the space or have a single work that's present many times in training like fast inverse square root, the model may even replicate recognizable chunks of the training set. It could be that this is sufficiently transformative that the output is not derivative, but as I said it's not obvious to me.