That's a very short example, but it is a new arrangement of the existing information. It's not a new valuable arrangement of information, but new nonetheless. And yes, rearrangement is transformation. It's very low entropy transformation, but transformation nonetheless. Collages and summaries are in fact, a thing that humans make too.
Unless you mean "new" as in, something nobody's ever written before, in which case not even you can create new information, since pretty much everything you will ever say or write down can be broken down into pieces that have been spoken or written before, which is not exactly a useful distinction.
There’s no transformation, it’s not capable of transformation, it’s just a very complicated text jumbler that’s supposed to jumble text so that the output is readable by humans.
Saying it doesn't make it true, especially when you follow it up with a self-debunk by saying it transforms the text by jumbling it in specific ways that keep it readable to humans, which requires transformation as like you just demonstrated, randomly swapping words does not make legible text..
You’re taking investment advice from a parrot that had the entirety of reddit investment meme subreddits beamed into its brain.
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I decide what my argument is, thank you very much. Your interpretation of it is outside of my control, and while I might try to avoid it from going astray, I cannot stop it from doing so, that's on you.
I wasn't giving a definition of copyright infringement, since that depends on the jurisdiction, and since you and I aren't in the same one most likely, that's nothing I would argue for to begin with. In the most basic form of plagiarism, people do so to avoid doing the effort of transformation. More complex forms of plagiarism might involve some transformation, but still try to capture the expression of the original, instead of the ideas. Analysis is definitely relevant, since to create a work that does not infringe on copyright, you generally can take ideas from a copyrighted work, but not the expression of those ideas. If a new work is based on just those ideas (and preferably mixes it with new ideas), it generally doesn't infringe on copyright. It's why there are so many copycat products of everything you can think of, that aren't copyright infringing.
While depending on your definition Mario could be a sufficiently complex pattern, that's not the definition I'm using. Mario isn't a pattern, it's an expression of multiple patterns. Patterns like "an italian man", "a big moustache", "a red rounded hat with the letter 'M' in a white circle", "overalls". You can use any of those patterns in a new non-infringing work, Nintendo has no copyright on any of those patterns. But bring them all together in one place again without adding new patterns, and you will have infringed on the expression of Mario. If you give many images of Mario to the AI it might be able to understand that those patterns together are some sort of "Mario-ness" pattern, but it can still separate them from each other since you aren't just showing it Mario, but also other images that have these same patterns in different expressions.
Mario's likeness isn't in the model, but it's patterns are. And if an unethical user of the AI wants to prompt it for those specific patterns to be surprised they get Mario, or something close enough to be substantially similar, that's on them, and it will be infringing just like drawing and selling a copy of Mario without Nintendo's approval is now.
You have absolutely no legal basis to claim they are infringement, as these things simply have not been settled in court. You can be of the opinion that they are infringement, but your opinion isn't the same as law. The articles you showed are also simply reporting and speculating on the lawsuits that are pending.