There's a more interesting question about the copyright status of the code it outputs, since the language model is sort of like a compiler, but also not like a compiler since the output is based on other people's copyrighted code.
I feel a lot of people get caught up on the output code and completely ignore the fact that copilot itself is likely a massive copyright violation.
Copilot breaks the assumptions about the lossy nature of human memorization, so a lawsuit challenging the merits of the activity is at least warranted.
Copyrighted content can be used without the holder’s permission under “Fair Use”.
Don’t assume all code can be copyrighted. Purely functional expressions are not copyrightable. Code is math.
There’s a lot here to unpack.