Hey! This is a great question, and I have what I hope is a very hope-filled answer.
By the way, I don't call image generation "AI." It's not. There's no actual intelligence involved. It's an algorithm that averages images and combines them into something new. I refer to it as GenSlop.
First, the reason you're seeing such a proliferation of image generators attaching their dirty little claws into every website on the internet is due to what I call "just-in-casing." Rather than develop an ACTUAL ethical image generator (which would only use images from creative commons or pay artists for their use) generators like Deviantart's DreamUp and Twitter's Grok (?????? wtf is that name) have just stuffed LAION-5 into their code and called it a day.
Why? Why not wait and create an ethical dataset over several years?
Because it's become more likely than not than image generation is going to become strictly regulated by law, and companies like DA, Stability, Twitter, Adobe, and many others want to profit off it while it's still free and "legal."
I say "legal" in quotes, because at the moment, it's neither legal nor illegal. There are no laws in existence to govern this specific thing because it appeared so fast, there was literally no predicting it. So now it's in a legal grey area where it can't be prosecuted by US courts. (But it can be litigated--more on that in a bit.)
When laws are passed to govern the use of image generators, these companies that opted to use LAION-5 immediately without concern for the artists and communities they were harming will have to stop. but because of precedent, they will likely have their prior use of these generators forgiven, meaning they will not be forced to pay fines on their use before a certain date.
So while it seems they're popping up everywhere and taking over the art market, this is only so they can get in their share of profits from it before it becomes illegal to use them without compensation or consent.
But how do I know the law will support artists on this?
First, litigation. There are several huge lawsuits right now; one notable lawsuit against almost every major company using GenSlop technology with plaintiffs like Karla Ortiz and Grzegorz Rutkowski, among other high-profile artists. This lawsuit was recently """pared down""" or """mostly dismissed""" according to pro-GenSlop users, but what really happened is that the judge in the case asked the plaintiffs to amend their complaint to be more specific, which is generally a positive thing in cases like this. It means that precedent after a decision will be far clearer and have a longer reach than a more generalized complaint.
I don't know what pro-GenSloppers are insisting on spreading the "dismissal" tale on the internet, except to discourage actual artists. What they say has no bearing in the court, and it's looking more and more likely that the plaintiffs will be able to win this case and claim damages.
Getty Images, a huge image stock company, is also suing Stability AI for scraping its database. I'm not as well-versed on the case, though.
The other positive, despite what a lot of artists are saying, is the new SAG-AFTRA contract.
It's not perfect. It still allows GenSlop use. But it does require consent and compensation. Ideally, it would ban the use of artist images and voice entirely, but this contract is far better than what they would have gotten without striking. If you recall, before the strike, the AMPTP wanted to be able to use actor images and voices without any compensation or permission, without limitation.
And you can bet your ass that Hollywood isn't going to allow other organizations to have unregulated GenSlop use if they can't. They might even step in to argue against its use in front of congress, because their outlook is going to be "if we can't make money stealing art, no one else should be able to, either."
TL;DR: the huge proliferation of image generators and GenSlop right now is only because it's neither legal nor illegal. Regulations are coming, and artists will still be necessary and even required. Because the world is essentially built on a backbone or artistry.
I personally can't wait to drink the tears of all the techbros who can't steal art anymore.