Digital Alchemy? Rethinking Copyright in the Age of AI-Generated Content: Lessons and Reflections from the AI Value Chain

Abstract The emergence of generative artificial intelligence (generative AI) has profoundly reshaped content creation by lowering marginal costs, altering the role of human creators, and restructuring industrial processes. These shifts pose three critical challenges for intellectual property (IP) frameworks: redefining creative behaviors in human–AI collaborations, sustaining incentives for innovation, and addressing gaps in copyright mechanisms. Against this backdrop, the Beijing Internet Court (BIC) issued China’s first judicial ruling on the copyrightability of AI-generated images in 2023. The court held that AI-generated content (AIGC) could qualify for copyright if there is demonstrable human intellectual input and originality. However, the ruling also emphasized the need for case-by-case assessments, particularly in hybrid human–AI creative processes. This landmark decision has sparked intense debate over whether and how AIGC should be considered as a “work” under copyright law, with particular focus on requirement of human authorship and the threshold of originality. In addition, a systematic analysis of the AIGC value chain highlights the far-reaching implications of human authorship claims for various stakeholders, including creators, AI developers, prompt engineers, and end users. To address these emerging legal and ethical issues, this Article proposes two key reforms: first, extending the scope of fair use under Article 24 of China’s Copyright Law to account for AI-generated works, and second establishing a “whitelist” mechanism in the Regulations for the Implementation of the Copyright Law. These measures aim to balance the protection of human creativity, ensure equitable value distribution among stakeholders, and foster sustainable innovation in the AI-driven creative ecosystem.