Yeah it seems very clear that the cheapest artstyle of the future will be whatever AI can output with minimal human editing or involvement. And some studios will go that route.

Although I don't see AI in game art becoming accepted by the wider public any time soon, and definitely not by the indie crowd.

I've also been thinking about this for animation. I foresee cheap limited animation (sliding layers, only mouth moving, etc) being replaced by incoherent un-/barely edited AI output instead.

It seems like a good pixel art model should be trained from scratch to emit high-quality low-resolution outputs, rather than trying to jerry-rig a generalist high-resolution model to unnaturally output tiny images (or even worse, a regular grid of exactly NxN color blocks).