> the author shall be taken to be the person by whom the arrangements necessary for the creation of the work are undertaken.

This seems extremely vague. One could argue that any part of the pipeline counts as an "arrangement necessary for the creation of the work", so who is the author? The prompter, the creator of the model, or the creator of the training data?

The courts will have to settle that according to circumstances. I think it is likely to be the prompter, and in some cases the creator of the training data as well. The creator of the model will have copyright on the model, but unlikely to have copyright on its outputs (any more than the writer of a compiler has copyright on its output).