You can get semi-decent sprite work out of GenAI models, but you still have to put in some manual work (scale normalization, palette reduction, grid alignments, etc). It's definitely not "out-of-the-box" yet.
The agentic tooling in some of the latest models is getting pretty crazy too - somebody on Reddit recently shared an example of using GPT-6 Astra to generate sprites with Aseprite, an open-source, popular pixel art editor and it worked shockingly well.