The artificial intelligence (AI) industry is facing significant challenges regarding intellectual property (IP) infringement, with numerous cases pending worldwide. The issue lies in AI models using data scraped from the web without proper attribution or licensing, leading to potential legal consequences. This situation threatens the progress of AI and machine learning (ML) systems, as the current training model could become untenable.

In response, some AI developers are creating solutions that respect IP rights using blockchain technology. Blockchain-powered AI marketplaces offer models, datasets, and computation on decentralized networks. For instance, blockchain technology company droppGroup developed droppLink, a solution that uses tokenization to track model activity and allows IP owners to offer their IP under specific commercial terms via smart contracts.

However, the AI industry is at risk of slowing innovation and getting entangled in multi-year lawsuits until the IP infringement debate is resolved. If the AI ethics debate leans towards plaintiffs claiming copyright infringement, it could be a blessing in disguise for the AI industry. Using high-quality, curated datasets with proper attribution can ensure greater reliability of AI systems.

While blockchain can't fix everything, tokenization has clear utility in automating payment streams and providing full attribution. If adopted at scale, this framework could ensure fair remuneration for IP owners and allow AI innovation to flourish. However, the current market scenario remains pessimistic, with the potential for prolonged legal battles and slowed progress.