Those are all value judgements, and capital allocation is a value judgement too. I don't think an AI can optimally make decisions like that without the input of people. And an economy based on the input of people is still a free market. Perhaps with an AI in control and personal input we could make a much more democratic market though, which would be interesting.

Your core assumption is that it's possible for an AI-driven centrally planned economy to be "far more efficient" than a market economy. There are two problems here: getting your AI the information they need to make the right decisions, and the political risks of implementing a perfectly efficient centrally planned economy, which will by necessity cause all kinds of suffering and death as a result of its allocation decisions (which, by the way, will probably be guided by value judgments made by humans, but I digress). Both of these are huge challenges, and it's not clear to me that either of them will be easier to accomplish with a AI-driven planned economy vs. a pure market economy (which also has its problems, I know!). They're ultimately just two different kinds of algorithms, and it's unclear to me that the top-down centrally planned approach is necessarily better, even given general AI and tons of input information.

Increasingly, the whole world is algorithmically analyzed and driven. Decisions to hire and fire people, or whether to invest, or what type of product to build. College students are following this trend by majoring in CS and data science, while liberal arts departments nationwide are downsizing. It's only a matter of time before these algos are unified and all human decisions take a backseat to the decisions of machines.