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The vast majority listen to ads in order to listen to it for free. Artists make almost nothing on streaming. It completely changed history.

The problem here is that the law has already been written to some extent. Google Books is the most relevant case you can point to that set precedent over what constitutes fair use of copyrighted material and the extent the transformation of those works can be commercially exploited. In that case works were copied without permission with small chunks of those works redistributed verbatim, and that was when it was working as designed. There's an argument to be made that this AI generator stuff is actually less egregious.

>now the vast majority of people who listen to music pay for it.

Well not really, it's just freely available online.