> AI company buys a book and scans it, they are reproducing the book without a license, correct

isn't digitizing your own copies as backups and personal use fine? so long as you dont give away the original while keeping the backups. similarly, dont give away the digital copies.

It is, Google Books did it over a decade ago (bought up physical books and scanned them all). There were some rulings about how much of a snippet they were allowed to show end users as fair use, but I'm fairly sure the actual scanning and indexing of the books was always allowed.