But if AI can do anything that human labor can do, what would even be the incentive for AI owners to farm wheat and sell it to people? They can just have their AIs directly produce the things they want.

It seems like the only things they would need are energy and access to materials for luxury goods. Presumably they could mostly lock the "human economy" out of access to these things through control over AI weapons, but there would likely be a lot of arable land that isn't valuable to them.

Outside of malice, there doesn't seem to be much reason to block the non-technological humans from using the land they don't need. Maybe some ecological argument, the few AI-enabled elites don't want billions of humans that they no longer need polluting "their" Earth?

When was the last the techno-industrialist elite class said "what we have is enough"?

In this scenario, the marginal cost of taking everything else over is almost zero. Just tell the AI you want it taken over and it handles it. You'd take it over just for risk mitigation, even if you don't "need" it. Better to control it since it's free to do so.

Allowing a competing human economy is resources left on the table. And control of resources is the only lever of power left when labour is basically free.

> Maybe some ecological argument

There's a political angle too. 7 (or however many it will be) billion humans free to do their own thing is a risky free variable.