Text-to-image algos did the same thing for a while, but you look at the latest full-size DALL-E and it's pretty much flawless.
If I were considering art school, I'd certainly be reconsidering my options. Maybe there are some defects in the output, but nothing photoshop can't fix.
I think where humans win out (for now) is where a high degree of specificity/precision is needed (e.g. graphic design). Or certain legal requirements are present - AI art can't be copyrighted at this time - such as logo design.