Of the various recent uses of generative AI, Copilot is probably the one most likely to be found fair use and image generation the least likely.
But in any case, Authors Guild is not the final word on the subject, and anyone trying to argue for (or against) fair use for generative AI who ignores Warhol is going to have a bad day in court. The way I see it, Authors Guild says that if you are thoughtful about how you design your product, and talk to your lawyers early and continuously about how to ensure your use is fair and will be seen as fair in the courts, you can indeed do a lot of copying and still be fair use.
I agree. Nothing is going to be the final word until more of these cases are heard. But I still don't think Warhol is as strong even against other uses of generative AI, and in fact I think in some ways argues in their favor. The court in Warhol specifically rejects the idea that the AWF usage is sufficiently transformed by the nature of the secondary work being recognizably a Warhol. I think that would work the other way around too, that a work being significantly in a given style is not sufficient for infringement. While certainly someone might buy a license to say, Stable Diffusion and attempt to generate a Warhol style image, someone might also buy some paints and a book of Warhol images to study and produce the same thing. Provided the produced images are not actually infringements or transformations of identifiably original Warhol works, even if they are in his style, I think there's a good argument to be made that the use and the tool are non-infringing.
Or put differently, if the Warhol image had used Goldsmith's image as a reference for a silk screen portrait of Steve Tyler, I'm not sure the case would have gone the same way. Warhol's image is obviously and directly derived from Goldsmith's image and found infringing when licensed to magazines, yet if Warhol had instead gone out and taken black and white portraits of prince, even in Goldsmith's style after having seen it, would it have been infringing? I think the closest case we have to that would have been the suit between Huey Lewis and Ray Parker Jr. over "I Want a New Drug"/"Ghostbusters" but that was settled without a judgement.
I do agree that Warhol is a stronger argument against artistic AI models, but it would very much have to depend on the specifics of the case. The AWF usage here was found to be infringing, with no judgement made of the creation and usage of the work in general, but specifically with regard to licensing the work to the magazine. They point out the opposite case that his Campbell paintings are well established as non-infringing in general, but that the use of them licensed as logos for soup makers might well be. So as is the issue with most lawsuits (and why I think AI models in general will win the day), the devil is in the details.
But in any case, Authors Guild is not the final word on the subject, and anyone trying to argue for (or against) fair use for generative AI who ignores Warhol is going to have a bad day in court. The way I see it, Authors Guild says that if you are thoughtful about how you design your product, and talk to your lawyers early and continuously about how to ensure your use is fair and will be seen as fair in the courts, you can indeed do a lot of copying and still be fair use.