Ulu-Mulu-no-die

Exactly, that’s the problem.

human artists are worried they will be replaced

The problem is plagiarism, easy to control when humans do it, not so much when AIs are involved, that’s why we need regulations.

As for copyright infringement, what exactly is being violated here?

Intellectual property of the original art creators? OP says “unlicensed”, if you take any piece of art someone else created, and you use it to make your own stuff without their authorization, you’re committing a crime.

Rather, it highlights that people need to adapt and evolve.

And risk being sued? Valve is right in being wary of this, especially since there’s no real regulation about it.

Let’s have regulations first, then we can tell people to adapt.