Basically valve is saying no AI generated content. The premise is that all AI generated content violates copyright which isn't necessarily true. To me, it sounds like their side stepping a potential issue rather than an actual issue with a copyright holder complaining of infringement with a particular IP.
Yes I can see that now but that seems too broad. Hypothetically if a model's trained on a thousand images only which 10 images are copyright. Does that mean of all images generated violate copyright law...?