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Most art was already commodified, and it was commodity artists, not creative artists who got the most brutal axe.
Essentially, contrary to your point about AI having imagination, creativity is the primary skill it lacks. It's basically a machine for producing median outcomes based on its training data, which is about as far away from creativity as you can get.
But for most artists, their jobs were based on providing quotidian, derivative artworks for enterprises that were soulless to begin with. To the extent that creativity was involved in their finished products, it was at a higher level than their own input, i.e. a director or something commissioning preset quotidian assets as a component in their own 'vision', the vision being the creative part of the whole deal.
However, I do believe creative artists will be threatened too. It's a little complicated to get into, but I think creative art depends not just on lone individuals or a consumer market, but on a social and cultural basis of popular enthusiasm and involvement in a given artform. I'm talking about dilettantes, critics, aficionados here. It's a social and cultural pursuit as much as it's an individual or commercial one, and I think that AI will contribute to the withering away of these sorts of underpinnings the same way corporate dominance and other ongoing trends previously have.
So for the artistic field, I envision complete and total commoditized slop produced by machines, once the human spirit has finally been crushed.
If your market consists of 99 derivative rip-offs and one legitimately interesting and fresh idea, the fresh idea will take half the market and the 99 rip-offs will fight over the other half. If there are 999,999 derivative rip-offs, then they'll have to split their half a lot more ways but they still won't be able to push in on the fresh idea's cut.
Art is a winner-takes-all industry. The JK Rowlings and Terry Pratchetts of the world have many thousands of times as many sales as Joe Average churning out derivative slop that's merely so-so. The addition of more slop won't change the core dynamic. Fundamentally, anyone trying to get the audience to accept a lower quality product isn't pitting themselves against the ingenuity of the artist, but the ingenuity of the audience. Trying to hide information from a crowd that has you outnumbered thousands-to-one is not easy.
If you get 999,999 rip-offs the market simply collapses.
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Okay, I like J. K. Rowling, I think she was underrated back in the day by Serious Literary People, but I still feel like bringing her up torpedoes your case about more creative artists going further.
Sure, her writing's mostly pretty average (...or abominable, if you count the Fantastic Beasts movies), but don't underrate the skill of being able to wrap up a highly-anticipated series with an epic and decently satisfying conclusion. Sure would be nice if a certain "highly-skilled" fantasy author with the middle initials R. R. .... uh, whose first name isn't John ... could manage that.
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Because creative artists got the axe a very long time ago. I expect the modal net earnings for a creative artist is already quite negative.
How much work has there ever been for creative artists? I would bet that a solid 95% of art over the last 1000 years has been one of:
There used to be a lot of jobs for people liks: local music hall player, freelance graphic designer, craftsman stoneworker, small town paper writer, etc. Admittedly most of those dried up long ago, though.
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