I don't think AI will ever "replace" art. That's like when people were afraid that photography would make art irrelevant. Photography encouraged painters to abandon realism and embrace personal expression. AI can't generate something spontaneously without a prompt, so it will mostly be used to imitate the styles of well-established artists. It cannot "be" the next CƩzanne or Picasso.
The real problem is economic, especially for people who make concept art, fanart, commissions, etc. Those people are seriously threatened by AI because their work is basically done by request. So of course their customers are going to prefer the cheap or free option of AI generation. There will be some commission artists who survive probably on the sheer strength of their talent, and there will always be people who would rather commission a "genuine" piece, but the market will become smaller.
I think this is basically a problem with how artists haven't been fairly compensated for their work for ages, how the commercial illustration market collapsed in the 2000s, and how most genre artists work as freelancers by commission. Those people never had job security and now AI is coming to wipe out their market. It must be extremely frustrating.
Some people believe that the general public will tire of the AI art "style," which is still easily identifiable in most cases, but I don't think that's true. LLMs will continue to evolve and produce more varied, more sophisticated, and more faithful images. Besides, in 99% of cases, people just want to generate a sexy lady or a photorealistic PokƩmon or a meme or whatever. They don't need a genius to do it. And as long as it continues to be cheaper than paying an artist, they will certainly prefer it.