I think there's a lot of different reasons all simultaneously going on.

Most human musicians have very little power; that's been going away for a long time, even since "canned music" "robots" pushed live bands out of cinemas a century ago: https://www.smithsonianmag.com/history/musicians-wage-war-ag...

Most popular music already feels, and to an extent is, fake. Not only because mere recording allows repeated takes until it's inhumanly "perfect".

When I played an MP3 of Britney Spears to my mum around the turn of the century, she thought it was a robot singing because of the autotune.

The Monkees was famously an attempt at a manufactured band whose members just happened to not feel like playing that game and did it for real, Gorillaz is even more obviously manufactured. Parasocial relationships are inherently different from "real" relationships, but the performers have to pretend that it's personal when they address a crowd or a camera.

Axis of Awesome demonstrated the similarity of most modern hits with their "4 Chords": https://youtu.be/oOlDewpCfZQ?feature=shared

Those with the power were, possibly still are, the record labels; but if the AI are trained on the works of small musicians that can't afford the copyright cases or the political influence, but also whose works are not under the umbrella of the labels who do have those resources but not the right or short term motivation to intercede on their behalf, the big labels themselves may lose the consumer market to free AI output, while professionals will dismiss both the AI output and the label's output as "just different kinds of slop but both slop" (or whatever the current insult de jour is for AI).