There is definitely an overreaction to AI use, when specifically games can make very good use of it. Smaller teams can create better games, and using smaller AI models to run on a GPU during playing could enable some amazing new features for dialogue or dynamic storytelling.
If there is any place where an AI hallucinating and riffing isn't a problem it's gaming.
Copying isn't stealing, and learning or training on public information certainly isn't. Your argument based on a vast expansion of what is "intellectual property" is disgusting and moronic and dangerous.
If generative AI can generate useful work, who gets to profit from it? That is the only question since AI is inevitable. But you're arguing that only capitalists and large companies that can afford to "license" this new form of intellectual property may profit. I'm saying AI should be open source, and the ability to make use of this cheaper generative work should be able to be used by all for free.