Who Owns AI-Generated Game Assets? Copyright Risks for Studios Using AI Art, Music, and Code

Game studios are moving fast to integrate AI tools into their asset pipelines. Concept artists generate background plates in Midjourney, composers prototype tracks in Suno, and engineers scaffold NPC dialogue systems with AI-generated code. The speed and cost savings are real. But the copyright questions are not going away — and the answers may be different from what your team assumes.

Here is the core problem: the U.S. Copyright Office has been clear that works generated entirely by AI without sufficient human authorship are not copyrightable. That means some of the assets your studio is producing right now may not be protectable — and if they are not protectable, anyone can copy them. At the same time, platforms like Steam now require AI disclosure, and the terms of service of AI tools like Midjourney and Suno create a separate layer of risk around commercial use and ownership. This guide walks through what game studios can and cannot protect when using AI-generated art, music, and code — and what to do about it.

For a broader look at how AI intersects with IP strategy — including when to pursue patents versus trade secrets for AI innovations — see our AI patent strategy guide for startups. And if your studio is negotiating with AI vendors, our AI vendor contract terms guide covers the clauses you need to redline before signing.

The Human Authorship Requirement: What the Copyright Office Says

The foundational rule is simple: U.S. copyright protects only works of human authorship. The U.S. Copyright Office has been developing its position on AI-generated works since launching its AI initiative in early 2023, and on January 29, 2025, it released Part 2 of its Report, Copyright and Artificial Intelligence: Copyrightability. The report's conclusion is direct: "the outputs of generative AI can be protected by copyright only where a human author has determined sufficient expressive elements." This can include situations where a human-authored work is perceptible in an AI output or a human makes creative arrangements or modifications of the output — but not the mere provision of prompts.

The Copyright Office's blog post explaining the report confirms that "the use of AI to assist in the process of creation or the inclusion of AI-generated material in a larger human-generated work does not bar copyrightability" — but the Office also affirmed that "material generated wholly by AI is not copyrightable." The vast majority of commenters in the Office's review process agreed that existing law is adequate on this point.

For game studios, this means the spectrum of protectability looks like this:

• Raw AI output (no protection): An image generated by Midjourney from a text prompt, with no further human modification, is not copyrightable. Anyone can copy it.
• Human-arranged AI compositions (partial protection): If a human selects, arranges, and modifies AI-generated elements into a larger work — say, a concept art sheet where an artist composites AI-generated elements into a hand-painted scene — the human's arrangement and modifications may be protectable, even if the underlying AI-generated elements are not.
• Human-authored works with AI assistance (full protection): If a composer writes an original melody and uses AI to generate an orchestral arrangement that the composer then substantially revises, the human-authored elements are fully protectable.

The line between "partial" and "full" protection is where most studios will operate — and it is also where the legal uncertainty is greatest. The Copyright Office has promised ongoing registration guidance and an update to its Compendium of practices, but for now, the safest approach is to assume that raw AI output is unprotectable and to document the human creative contributions that go into every asset your studio intends to commercialize.

Thaler v. Perlmutter: AI Cannot Be an Author

The human authorship requirement was tested and affirmed in Thaler v. Perlmutter. Dr. Stephen Thaler attempted to register a copyright in a visual work named "A Recent Entrance to Paradise," listing the Creative Machine — an AI system he developed — as the author. The Copyright Office refused registration, and the U.S. District Court for the District of Columbia upheld the refusal, holding that "human authorship is a bedrock requirement of Copyright." In March 2025, the D.C. Circuit affirmed in Thaler v. Perlmutter, No. 23-5233 (D.C. Cir. Mar. 18, 2025), that a non-human machine cannot be an author under the U.S. Copyright Act.

The practical implication for game studios: you cannot list an AI system as the author of any asset in a copyright registration. When you file a registration, the author must be a human — and the human must have made a sufficient creative contribution to the work. Listing "Midjourney" or "Suno" as a co-author is not a viable strategy.

Zarya of the Dawn: The Registration Precedent That Matters

The most instructive precedent for game studios is the Copyright Office's decision on Zarya of the Dawn, a comic book created by Kris Kashtanova using Midjourney-generated images. Kashtanova initially received a copyright registration for the full work, but after the Copyright Office learned that the images were AI-generated, it cancelled the original registration and issued a new one that covered only the text and the arrangement of images and text — not the AI-generated images themselves.

The Copyright Office's letter explained that "the images in the Work that were generated by the Midjourney technology are not the product of human authorship." Even though Kashtanova argued she had "guided" the structure and content of each image through prompts, the Office concluded that "it was Midjourney — not Kashtanova — that originated the 'traditional elements of authorship' in the images."

For game studios, the Zarya decision has three practical takeaways:

1. Prompting is not authorship. Writing detailed prompts does not make you the author of the AI-generated output. The Copyright Office was explicit that the human's role in guiding the AI did not constitute the creative control necessary for authorship.
2. Arrangement and selection can be protected. While the individual AI-generated images were not protectable, Kashtanova's selection, coordination, and arrangement of those images within the comic was protected. This means a game's level design, UI layout, and asset composition may be protectable even if individual AI-generated assets are not.
3. Disclosure matters. The original registration was cancelled because Kashtanova did not disclose that the images were AI-generated. When registering a copyright, you must disclose AI-generated content. Failing to do so can result in cancellation of your registration.

What Studios Can Register vs. Raw AI Output

Given the Copyright Office's guidance and the Zarya precedent, here is a practical framework for what your studio can and cannot register:

Likely Registerable

• Human-written game code: Code written by your engineers — even if they used AI tools like GitHub Copilot for auto-completion — is generally registerable as long as the human engineer made the substantive creative and technical decisions. The Copyright Office's guidance acknowledges that AI can assist in the process of creation without barring copyrightability.
• Human-written narrative and dialogue: If your narrative designer writes NPC dialogue and uses AI only for brainstorming or proofreading, the written dialogue is human-authored and registerable.
• Human-composed music with AI arrangement: If your composer writes the melody, harmony, and lyrics, and uses AI to generate an orchestral backing track that the composer then substantially revises, the human-authored elements are registerable.
• Level design and asset arrangement: The selection, coordination, and arrangement of assets within your game — even if some individual assets are AI-generated — may be registerable under the Zarya precedent.

Likely Not Registerable

• Raw Midjourney concept art: An image generated by Midjourney with no further human modification is not registerable.
• Raw Suno music tracks: A track generated by Suno from a text prompt, with no further human arrangement or composition, is not registerable.
• AI-generated NPC dialogue with minimal human editing: If an AI tool generates NPC lines and a human only makes minor edits (fixing typos, adjusting a word or two), the level of human contribution may be insufficient for copyright protection.

The key question is always the same: did a human make sufficient creative decisions to determine the expressive elements of the work? If the answer is "the AI decided," the work is not protectable. If the answer is "the human directed the creative choices and the AI was a tool," the human-authored elements are protectable.

Platform ToS Risks: Midjourney, Suno, and Commercial Use Terms

Even if the Copyright Office says an asset is not copyrightable, the terms of service of the AI platform you used may impose separate restrictions on commercial use. These terms create a contractual layer on top of the copyright analysis — and studios that ignore them do so at their own risk.

Midjourney

Midjourney's Terms of Service distinguish between paid and free users. Paid subscribers generally receive commercial use rights to the images they generate, while free users are limited to non-commercial use. However, Midjourney's terms also include provisions that allow the company to use generated content for its own purposes, and the terms can change. Studios using Midjourney for commercial assets should: (1) maintain an active paid subscription, (2) archive the terms of service as they existed at the time of generation, and (3) understand that the platform's commercial use grant does not confer copyright ownership — it only grants permission to use the output commercially.

Suno

Suno's help center is explicit about the distinction between commercial use rights and copyright ownership. Songs made on the free plan are "only intended for personal, non-commercial use" and "cannot be monetized." Songs made while subscribed to a Pro or Premier plan are "granted commercial use rights," which allows distribution to Spotify, Apple Music, and other platforms. But Suno's own guidance acknowledges that "registering them is a bit more complicated than that" — and advises users to consult their local copyright office. This is Suno effectively telling you: commercial use permission is not the same as copyright ownership.

For game studios, this means a Suno-generated track may be usable in your game (if you have a paid subscription), but it may not be copyrightable — which means you cannot prevent others from copying it. If you want enforceable rights in your game's soundtrack, you need substantial human creative contribution to the composition.

Unity Muse and Other Game Engine AI Tools

Unity's Muse AI assistant, which generates textures, sprites, and code within the Unity ecosystem, adds another layer. Unity's terms govern the use of Muse-generated content, and studios should review those terms carefully before incorporating Muse outputs into commercial builds. The same principle applies: the platform's permission to use the output commercially is separate from whether the output is copyrightable.

For more on navigating AI vendor agreements — including data training opt-outs, output IP ownership, and liability allocation — see our AI vendor contract terms guide.

DMCA and Takedown Risk for AI-Generated Assets

AI-generated assets carry a distinct infringement risk that human-created assets do not: the possibility that the AI model reproduced protected elements from its training data. If Midjourney generates an image that closely resembles a copyrighted character design, or if Suno produces a track that copies a substantial portion of an existing song, your studio could face a DMCA takedown notice — or worse, a copyright infringement lawsuit.

The risk is not theoretical. The RIAA filed copyright infringement lawsuits against Suno and Udio in 2024, alleging that both platforms copied "decades worth of the world's most popular sound recordings" without permission to train their generative AI models. If those models produce outputs that resemble training data, the downstream user — your studio — could be exposed to infringement claims even if you had no knowledge of the underlying training data.

For game studios, the practical risk mitigation steps are:

• Audit AI-generated assets for similarity to known works. Before shipping an AI-generated character design, texture, or music track, compare it against existing copyrighted works in the same genre. If the output closely resembles a known character, song, or artwork, do not use it.
• Maintain provenance records. Document which AI tool generated each asset, what prompt was used, and what modifications were made. If you receive a takedown notice, this documentation is your evidence of good-faith use.
• Understand that AI platform indemnities are limited. Some AI vendors offer copyright indemnification for outputs, but these programs typically require you to implement specific mitigations (content filters, metaprompts) and may exclude outputs that resemble training data. Read the indemnity terms before relying on them.

For a deeper look at how DMCA takedowns work in the music context — including the specific steps for filing and responding to takedown notices — see our AI voice cloning compliance guide for musicians, which covers the DMCA Section 512 process in detail.

Steam AI Disclosure Requirements: What Publishers Expect

In January 2024, Valve announced a new AI disclosure policy for games distributed on Steam. The policy, published on the Steamworks development news page, requires developers to disclose how they use AI in both development and execution of their games. The disclosure splits AI usage into two categories:

• Pre-Generated: "Any kind of content (art/code/sound/etc) created with the help of AI tools during development." Valve evaluates pre-generated AI content the same way it evaluates all other content — checking that the game does not include illegal or infringing material and is consistent with marketing materials.
• Live-Generated: "Any kind of content created with the help of AI tools while the game is running." In addition to the same rules as pre-generated content, developers must describe what guardrails they have put on the AI to prevent it from generating illegal content. Valve includes much of the disclosure on the game's Steam store page so customers can understand how the game uses AI.

Valve also released a new in-game reporting system that allows players to report illegal content in games that contain live-generated AI content. The only exception is adult-only sexual content created with live-generated AI, which Valve will not currently publish.

For game studios, the practical takeaway is that AI disclosure is now a mandatory part of the Steam submission process. You cannot avoid it by simply not mentioning AI — Valve expects you to fill out the AI section of the Content Survey, and the information you provide will appear on your store page. Plan your disclosure language carefully, and ensure it accurately reflects how AI was used in your development pipeline.

Other platforms and publishers are following suit. Console manufacturers and mobile app stores are developing their own AI disclosure requirements, and studios that build a disclosure framework now will be prepared for whatever those platforms require.

Contract Clauses Studios Need with Contractors and Freelancers

Most game studios do not produce all their assets in-house. Contractors, freelancers, and outsourcing studios are part of the pipeline — and many of them are using AI tools without telling you. This creates two categories of risk: (1) the contractor delivers AI-generated assets that are not copyrightable, and (2) the contractor's use of AI tools violates platform terms or creates infringement exposure.

Every contractor and freelancer agreement your studio signs should include the following AI-specific clauses:

1. AI Use Disclosure

The contract should require the contractor to disclose whether they used AI tools in producing the deliverables, and if so, which tools and how. This disclosure should be required before final delivery — not after. You need to know if the concept art you are paying for was generated by Midjourney before you incorporate it into your game.

2. Human Authorship Representation

The contractor should represent and warrant that the deliverables contain sufficient human authorship to be copyrightable, or if AI tools were used, that the human contribution meets the Copyright Office's standard for protection. If the contractor cannot make this representation, you need to know before you pay for the work.

3. Platform Compliance

The contractor should warrant that their use of any AI tool complies with that tool's terms of service, including any commercial use restrictions. If a contractor used a free Midjourney account to generate assets for your commercial game, that is a breach of Midjourney's terms — and it creates risk for your studio.

4. IP Assignment That Accounts for AI

Standard work-for-hire language assumes the contractor is the author of the work and can assign all rights to you. If the work is AI-generated and not copyrightable, there is nothing to assign. The contract should address this scenario explicitly: if any portion of the deliverables is not copyrightable due to AI generation, the contractor should assign all rights they do have and grant a broad, perpetual license to use, modify, and distribute the AI-generated portions regardless of copyright status.

5. Indemnification for AI-Generated Infringement

The contractor should indemnify your studio against claims that AI-generated deliverables infringe third-party rights. This is particularly important given the risk that AI tools may reproduce protected elements from training data. If a contractor delivers a Midjourney-generated character that turns out to closely resemble a copyrighted design, your studio needs contractual recourse against the contractor.

6. AI Tool Restriction or Approval

Consider whether your studio wants to restrict which AI tools contractors may use, or require pre-approval before contractors use AI in producing deliverables. Some studios are prohibiting AI-generated assets entirely; others are permitting AI for ideation and prototyping but requiring final deliverables to be human-authored. Whatever your studio's policy, it should be documented in the contract.

Actionable Next Steps

1. Audit your AI asset pipeline this quarter. Map every AI tool your studio uses — Midjourney, Suno, Unity Muse, GitHub Copilot, and any others — and for each, document what it generates, who uses it, and whether the output is incorporated into commercial builds. You cannot manage risk you have not mapped.
2. Classify each asset by protectability. For every AI-assisted asset in your game, determine whether it is (a) raw AI output (not protectable), (b) human-arranged AI composition (partially protectable), or (c) human-authored with AI assistance (fully protectable). Document the human creative contributions for each asset you intend to register.
3. Review your platform subscriptions. Confirm that your studio maintains paid subscriptions for any AI tool used to generate commercial assets. Archive the terms of service as they exist at the time of generation. Understand that commercial use permission is not the same as copyright ownership.
4. Prepare your Steam AI disclosure. If you are submitting to Steam, draft your AI disclosure language now. Identify which assets are pre-generated and which are live-generated, and document the guardrails you have implemented for any live-generated content.
5. Update your contractor agreements. Add AI use disclosure, human authorship representations, platform compliance warranties, IP assignment language that accounts for AI-generated content, and indemnification clauses to every contractor and freelancer agreement your studio signs. If you are using template agreements, have counsel review them for AI-specific gaps.
6. Implement an asset provenance system. For every asset in your game, record: (a) whether AI was used, (b) which tool, (c) what prompt or input was provided, (d) what human modifications were made, and (e) who made them. This provenance record is your evidence of human authorship if you seek copyright registration — and your defense if you face a takedown notice.
7. Engage counsel for an AI asset IP review. The cost of a proactive legal review of your AI asset pipeline is a fraction of the cost of discovering — during a publisher deal, a Steam review, or a copyright dispute — that your studio's most valuable assets are not protectable. We help game studios build AI asset workflows that are defensible, compliant, and positioned for commercial success.

The studios that treat AI-generated assets as a legal question — not just a production question — will be the ones that can defend their work, satisfy platform requirements, and protect their investment. The studios that do not will discover, often at the worst possible moment, that their asset pipeline has been producing unprotectable outputs the entire time. The technology is moving fast, but the legal fundamentals are stable: human authorship is the threshold, platform terms are the constraint, and disclosure is now mandatory. Build your pipeline around those facts, and your studio will be positioned to ship games that are both innovative and defensible.