I don't think that AI image generation in its current form replaces human creativity. You still need a human to guide the process, compose the image, judge the output, etc. What's being automated is the manual, traditional process of painting and drawing.

I see this technology as more analogous to hand writing books -> printing. I predict that more people, not less, will be involved in creative industries related to visual arts (design, film, illustration, animation, etc.) as a result of this technology becoming more accessible.