Echoing Palworld dev, video game lawyer says all her clients have anti-AI contracts because gamers hate it and it's a copyright landmine: "I think we're going to see lawsuits"

August 13, 2026 - 08:47

A video game attorney who works with major studios says nearly all her clients now have contracts that explicitly ban the use of generative AI in their projects. The reason is simple: gamers hate it, and the legal risks are too big to ignore.

The lawyer, who spoke on condition of anonymity to protect client relationships, said the industry has shifted hard against AI-generated assets after a wave of backlash from players and creators. "Don't touch it. It's not worth the legal liability," she said, echoing comments made by the developer of Palworld, who recently stated that his studio avoids AI entirely.

The core problem is copyright. Generative AI models are trained on massive datasets scraped from the internet, often without permission from the original artists, writers, or programmers. That means any AI-generated texture, dialogue, or character model could potentially infringe on someone else's work. And proving where the AI got its inspiration is nearly impossible.

The lawyer predicts lawsuits are coming. "I think we're going to see lawsuits within the next year or two that will set precedent," she said. Until courts clarify who owns AI output and whether training on copyrighted material is fair use, studios are choosing to play it safe.

For indie developers, the warning is even sharper. A single lawsuit can sink a small studio. Even if the case is weak, legal fees alone can be devastating. The message from the legal side is clear: if you want to ship a game without drama, keep AI out of the pipeline.