“The CO has taken the (entirely correct) position that copyright law exists to incentivize human acts of creative expression, which means that only works of human authorship are eligible for copyright.”
AI output gets no copyright, the same rule that denied one to a monkey’s selfie. A company that mixes AI into its product now has to document which parts a human made. The AI-made parts are public domain, and anyone can lift them. The cheapest way to own your product is to pay artists.