He in essence claims there is some intangible attribute of a work that defines it as art or not depending on both the person who made it and the process they went through.
It does seem like a slightly romantic notion, since for any given item you can’t know if it’s art or not just by looking at it, which seems a bit odd. But then again, I suppose there’s a reason people pay for guided tours at museums so they can learn about the history and background of a work.
Side note: the title is editorialised; it should be “The Hidden Cost of AI Art: Brandon Sanderson's Keynote”