Microsoft and Epic love AI, until it copies their games

Microsoft and Epic Games LOVE AI. Until AI starts copying their games. Then suddenly everyone remembers copyright law exists.

For years, tech companies have told artists, writers and developers to embrace generative AI. It's innovation! It's the future! Stop being so precious about your work!

Then AI coding tools got good enough to recreate popular games, and the lawyers came sprinting out of their offices.

The takedowns

On October 10, Epic Games issued a copyright takedown against an AI-assisted browser recreation of Fortnite. Microsoft has also targeted browser versions of Minecraft, Halo and Call of Duty.

The same Microsoft that's pouring billions into AI infrastructure and pushing Copilot everywhere. The same Epic that's reportedly telling developers on an upcoming Disney game to adopt an "AI-first" workflow, including AI-generated artwork.

What a delightful coincidence.

The awkward bit

Here's the awkward bit. Epic's own terms restrict using its game code and content to train generative AI. Yet Epic reportedly plans to use Anthropic's Claude, whose maker agreed to a $1.5 billion settlement over pirated books used in AI training. Notably, the settlement didn't require Anthropic to destroy the resulting models.

That doesn't automatically make Epic's use of Claude illegal. Training on copyrighted work and distributing an unauthorized copy of Fortnite are different legal questions. But the sudden enthusiasm for protecting creative work is still quite something.

Microsoft has its own uncomfortable paper trail. In internal communications disclosed during litigation, a Microsoft researcher warned that AI scraping could become one of the largest appropriations of human creative labor in history. Another memo warned that AI could undermine the very websites and creators supplying its training data.

And there's a new development: after Kotaku called out the hypocrisy, Tim Sweeney said Epic is working to remove some AI-training restrictions from Unreal Engine and MetaHuman licenses. Individual game developers would still choose their own terms.

What it means for AI governance

For engineering and product leaders, this is where AI governance gets interesting. Who owns the code your tools generate? What training data went into the model? And would you be comfortable if a competitor used the same approach on your product?

The real losers could be indie studios that can't afford an army of copyright lawyers.

Big Tech spent years telling creators that AI copying their work was progress. The moment someone recreated Fortnite in a browser, progress received a DMCA notice =)