I think "AI is replacing art" is a category error. If I read a book or look at a piece of art or listen to music, the whole point is to receive the thoughts, feelings, and lived experience of a human being.

But yes, AI is supplanting the mundane "art" that artists use as potboiler work, and that is the economic threat. The bitter horrible irony of art as a career is that the best art is often the hardest to sell, and it also takes the most time and energy to make. It's insanely hard to make a living doing just "pure art."