But all content is DMCA protected. Avoiding copyrighted content means not having content as all material is automatically copyrighted. One would be limited to licensed content, which is another minefield.

The apparant loophole is between copyrighted work and copyrighted work that is also registered. But registration can occur at any time, meaning there is little practical difference. Unless you have perfect licenses for all your training data, which nobody does, you have to accept the risk of copyright suits.

Yes, that's how every other industry that redistributes content works.

You have to license content you want to use, you cant just use it for free because it's on the internet.

Netflix doesn't just start hosting shows and hope they don't get a copyright suit...