AI art can not be copyrighted (at least in the United States) because the copyright office doesn't accept it if it's not made by a human. So if you use AI art to make a character, anyone can steal that character from you and make money from your success. You don't have any protection. Think of AI art as open source, currently.
The legal issues are that most AI are illegally trained on copyrighted art. There's a lot of investigations into AI, lawsuits against AI companies, etc. that will complicate its usage in the future. The copyright office is considering allowing art styles to be protected in the future, to better protect artists, and if your AI art is trained on that style, it might cause you legal issues at a later date.
I think if you use AI art as inspiration and/or heavily modify it by hand, you should be fine. Artists have been doing that sort of thing since forever. Take something, put your own spin on it and make it your own.