The incentive to create is almost never financial. How many artists finance their creative efforts by working day jobs? Making a living as an artist is more about buying yourself the time to focus on making art than it is about making money. People will continue to create art, however they can, because they must.
This is all stuff I am actively thinking about since it is impacting me right now, so I appreciate the discussion and would be happy to be wrong.
I'm not even slightly concerned about that.
1. Art is better when it's not paid. Real artists have day jobs that pay the bills and they create art to express their ideas, not to make money.
2. Paid art isn't going away, it will just change. Certain skillsets will be forgotten, like how landscape painting was replaced by photography. But talented artists will leverage AI tools to create works that are greater than anything that came before.
Trying to define who "real" artists are is a folly for the ages. It is the dream of many artists that they get paid for their art, and many achieve it. The starving artist is a mythos of pain and suffering, a good story but hardly good for art. Some of the best composers from history were paid, some of the most influential artists were from wealthy families. They were able to focus on their work without fear of money and because of this they could excel in techique and execution, which allowed them to produce some of the highest forms of their art in history.
The flip side of this is that if we undermine paid creators until there's no incentive for them to create, then the AIs abilities stagnate on old data and we as a society drop or at least diminish the skillsets that could create new media.
AI can generate stuff humans care to look at only because of the availability of data that humans created for eachother to enjoy. As tastes, fashions, zeitgeists and pop culture change amongst humans the AI models will always be behind and unable to follow trends completely. I think.