How much funding do you think you need for an MVP that's more Copilot-like? I might be interested in taking part in a seed round. Having AI do everything is a fun challenge, but I think the sort of people who would actually pay for a product would want to have some creative control and let the AI handle the parts they don't want to or can't do.
The Minecraft-esque graphics probably aren't an issue, but scaling up to provide all the needed assets probably is. There are AIs that can generate 3D models but having a consistent art style is required for it to work visually and you provided that here. Finding a way to quickly and cheaply scale the "kitbashing" seems key to any kind of productization.