I doubt generative AI music is going to become popular as anything but background noise, but I think it will plausibly cut into various commercial uses of music in ads and whatnot.
So while I don't think people are gonna be walking around with playlists of AI slop, businesses will be using it as a cost-effective option, which means it will be eating away at the gig potential for artists in the low-to-mid layers of the food chain. Which sucks, but is thankfully less grim than everyone just preferring the AI slop for some reason.