Readers Prefer Outputs of AI Trained on Copyrighted Books over Expert Human Writers

The use of copyrighted books for training AI has sparked lawsuits from authors concerned about AI generating derivative content. Yet whether these models can produce high-quality literary text emulating authors' voices remains unclear. We conducted a preregistered study comparing MFA-trained writers with three frontier models (ChatGPT, Claude, Gemini) writing up to 450-word excerpts emulating 50 award-winning authors' styles. In blind pairwise evaluations by 28 MFA-trained readers and 516 college-educated general readers, AI text from in-context prompting was strongly disfavored by MFA readers for stylistic fidelity (OR=0.16) and quality (OR=0.13), while general readers showed no fidelity preference (OR=1.06) but favored AI for quality (OR=1.82). Fine-tuning ChatGPT on authors' complete works reversed these results: MFA readers favored AI for fidelity (OR=8.16) and quality (OR=1.87), with general readers showing even stronger preference (fidelity OR=16.65; quality OR=5.42). Both groups preferred fine-tuned AI, but the writer-type X reader-type interaction remained significant (p=0.021 for fidelity; p<10^-4 for quality), indicating general readers favored AI by a wider margin. Effects are robust under cluster-robust inference and generalize across authors in heterogeneity analyses. Fine-tuned outputs were rarely flagged as AI-generated (3% vs. 97% for prompting) by leading detectors. Mediation analysis shows fine-tuning eliminates detectable AI quirks that penalize in-context outputs, altering the nexus between detectability and preference. While not accounting for effort to transform AI output into publishable prose, the median fine-tuning cost of 81 per author represents a 99.7% reduction versus typical writer compensation. Author-specific fine-tuning enables non-verbatim AI writing preferred over expert human writing, providing evidence relevant to copyright's fourth fair-use factor.