I have mixed feelings about the "AI" rush, and I think the tech bubble will either burst spectactularly in a few years or, like NFTs and VR, quietly fade into the background of the next big Silicon Valley grift.
On the one hand, AI is definitely a boon for certain kinds of games where real-life content would be questionable (like Free Cities, as others have already pointed out), or for franchises like Touhou where the existing art styles are easily mimicked.
On the other hand, I think even the most ardent AI proponents should accept that there's a lot of bad, shallow, cringey AI images out there. The visuals are not technically flawed, but look like they've been generated with the default settings. It's like a tidalwave of blandness that washes out even the most extreme content.
While the visuals are a mixed bag, where the current models absolutely fail is written content. The rise of AI seems to be strongly correlated with a decrease in the quality of human writing. Having graded hundreds of college papers both before and after the "AI" boom, I can confidently state that (at least in my personal experience) student writing is noticeably worse: more sophmoric, less curious. It's also bad in a different way than before. Bad papers in the old days had bad composition, flawed logic, poor grammar, that sort of thing. Now, the problem is vapidity. So many papers read like advertising copy. You can tell the prompt was either fed directly to an AI model, or written by someone exposed to an excess of AI-assisted writing. It's profoundly boring to read, and is beginning to seep into higher academia. There are fewer diamonds in the rough, and a lot more slop.
Reading comprehension has also declined massively among college students (and the lay administrators who increasingly meddle with the curriuculum). Whether the loss of reading comprehension is due to AI, social media, misguided educational reforms, television/streaming, or some combination of factors is less clear to me.
Then there is hysteria over AI growth. As with many politicized issues, a lot of the dialogue surrounding AI just seems really, really stupid to me, especially the worries about a rogue AI. In my view, true artificial intelligence does not yet exist in a meaningful sense. The current machine-learning models are very effective at mimicry and certain types of repeative algorithmic processing where there are obvious fail-states (unfolding proteins, quick-and-dirty translation, image construction from prompts, code-monkey-esque basic programming, locomotion), but the path from current models to artificial general intelligence (AGI) does not seem very promising. The recent agent-driven hacks are really not very impressive from a CS perspective. Machines that use rudimentary social engineering techniques have been around since Eliza.
Perhaps the biggest problem with AI is the data centers. The effects of AI data centers are visible, immediate, and objectively negative for the public. My town is under water-usage restrictions right now after a data center was built upriver. Other places in my state have purportedly seen their power-bills spike, or land seized by imminent domain so that data centers can be built.
I have yet to see anything produced by AI that would justify that cost. Easy porn generation and sycophantic digital assistants aren't worth it, methinks.
That brings me to the problem of overhyped potential. The dot.com bubble of 2000 and the video game crash of 1983 are good examples. In both cases, delusional financiers pushed a technology that wasn't ready, and crashed the market.
(In fairness, a counterexample would be GPS. Early global positioning systems were an unreliable joke. Now, they've gotten much, much better and have become so commonplace that road maps are hard to find at gas stations. When they get self-driving cars that can actually navigate reliably, then I'll accept the "AI" rush isn't just a bubble. Until then, I'll remain skeptical.)
I would also point out that technology doesn't always catch on or improve for a very, very long time. A good example would be machine-driven mills. Primitive watermills and even proto-type windmills were present already in classical antiquity, but did not really take off until the Middle Ages. Even then, textile mills were very, very slow to develop, and true factories came about only in the early modern period with the industrial revolution. Better, more standardized parts and better mathematical understanding were prerequisites for true industrialization.
I think our current "AI" is like a Roman watermill. Sure, AI has improved noticeably from earlier models and can produce results, but it still has a long way to go. And just as there isn't a clear and direct path from Roman watermills to modern assembly lines, there isn't a clear and obvious path from our primitive "AI" to AGI. Despite how badly the megacorporations and tech bros want it, there is no compelling reason to expect miraculous growth.
TLDR: it's a complicated issue, but I'd wager that the current AI bubble will either burst spectacularly in a few years, or quietly stagnate after some other new technology becomes the next big thing in Silicon Valley.