As a writer and engineer, I don't see it.
Can AI kludge together a ripping story? Sure. But there is a reason people still write new books and buy new books - we crave the human connection and reflection of our current times and mores.
This isn't just a high art thing. My kids read completely different YA novels than I did, with just a few older canon titles persisting. I can hand them a book I loved as a kid and it just doesn't connect with them anymore.
How I think AI CAN produce art that people want is through careful human curation and guided generation. This is structurally the same as "human-in-the-loop" programming. We can connect to the artistry of the construction, in other words the human behind the LLM that influenced how the plot was structured, the characters developed and all the rest.
This is akin to a bad writer with a really good editor, or maybe the reverse. Either way, I think we will see a bunch of this and wring our hands because AI art is here, but I don't think we can ever take the human out of that equation. There needs to be a seed of "new" for us to give a shit.