Guest: Tess Lynch, Founding Attorney, Clause and Affect
When Crimson Desert announced "no AI in our game," the internet applauded. But does anyone agree on what that actually means? Tess Lynch — gaming and IP attorney, founder of Clause and Affect, and one of the more practical legal voices covering this space — joined Greg to untangle what studios are really promising when they make that pledge, and what they're leaving dangerously undefined.
What we get into:
The three tiers of AI in games that almost nobody distinguishes clearly — procedural generation (been here forever, deterministic, mostly fine), machine learning trained on licensed data (DLSS, Adobe Firefly, getting complicated), and generative AI trained on scraped data (the one everyone's actually upset about, and for good reason).
Why "no AI" policies get weird fast — no Gmail, no Copilot, no AI meeting notes — and why the real target is almost always generative AI replacing human creative work, not automation tools embedded in software you're already using.
The consent problem hiding inside "licensed" datasets. Adobe Firefly is built on licensed images, but did those photographers consent to having their work used to train the model? Tess breaks down where that gets legally murky, and why the Scarlett Johansson standard she uses is a useful gut check.
UGC platforms and the IP trap studios don't see coming. When players generate content in your game — especially with AI tools — the question of who owns it, who's liable for it, and whether you can even copyright it is almost entirely unsettled law right now.
Why purely AI-generated work can't be copyrighted (current U.S. law requires human authorship), and what that means for studios shipping games with AI-generated assets as placeholders they forgot to swap out. Clair Obscure and Crimson Desert both came up.
The patchwork regulatory problem. Every state has its own privacy laws, its own AI laws, its own age assurance rules. Tess calls it what it is: an amalgamation that will never get cleaner until it becomes a federal issue — which she doesn't expect soon.
When should you actually talk to a lawyer? Her answer: yesterday. But more practically — before you touch sensitive data, before you go live with anything using AI in a novel way, and definitely before you sign contractor agreements that don't address it.
And on the business side: what it's actually like to build a solo law firm serving indie devs and creatives who can't pay BigLaw rates. Billing, time management, and figuring out what your work is worth.
Tess Lynch: LinkedIn | Clause and Affect website | Your AI NPC Might Be Illegal
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