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I'm working on AI collage generator with multiple png images from the internet (using google images search) and I wonder would my program break the law or not.

Program checks for watermark and omits images with watermarks. The images will be pixelified like very much, even PNG image of a flower 1024x768 will be transformed into 16x16 pixelified image.

It's like you type "barn with a sun and a horse on a field nearby" will create image with taken images from over the internet, but it will be like pixel art.

Generated images can be used by anyone, no matter the purpose.

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    I’d like others to chime in, but I think this question is off-topic here. This is primarily a legal question, so would be clearly on-topic at Law. The produced result is pixel art, not really anything of photographic interest, so from the visual arts perspective, it has more to do with Graphic Design than photography. But that is secondary to the main thrust of the question, which is about the legality of using found images online.
    – scottbb
    Jan 5 at 16:20
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DISCLAIMER: THIS IS NOT LEGAL ADVICE.

Not having a watermark does not put the image in the public domain and so you are using those images without permission to create another artwork.

This is called derivative work which is generally not allowed except certain conditions and restrictions but their wording is subject to interpretation which is why disputes often land in court. The gist is that you could use copywrighted work to produce art which is substantially different from the original and be within your rights.

Consult a lawyer if you plan on continuing with this approach because they can advise you the exact local laws and of potential consequences.

Otherwise, there are image search tools online where you can find images in the public domain or licensed for use by others which would avoid this doubt.

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    Derivative works are specifically NOT allowed by (most) copyright laws. New works that are substantially different from, but may contain some portion of, a copyrighted work are allowed and would qualify for their own copyright protections. Jan 6 at 14:34
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    That's what I said but made it clearer.
    – Itai
    Jan 6 at 17:56

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