[acoard]

Copying already copyrighted assets is clearly regulated. Valve knows what to do in this situation, and simply pulling down the offending game complies with the copyright regime.

It's unclear what the rules are going to be for AI generated art. There has been no law, or no court case, deciding it. As such, Valve is being a bit more defensive here to limit exposure.

I agree it's not a great trend, but it seems inevitable when this can lead to massive risk (lawsuits including Valve), and the upside is negligible. Valve is not going to lose market share over this, at least not for the foreseeable future.