I may be in the minority here when I say I don't see the problem. AI trained on millions of publicly available images used to speed up the concept stage of development seems like fair use to me. Like the developer says, commercial artists have always used other folks work to speed up their development, that sounds more problematic to me than drawing inspiration from a huge dataset.
"Fair use" has a specific meaning in copyright law. If something replaces the need for something else in the market, it's almost certainly not fair use. Generative AI replaced the need to hire an original artist.