There might be a quality increase in other areas of the game thanks for the cheaper art design, but not in what has been generated by those tools.
Since the AI is only a neural net parroting what it has learned from a single pool (or a very limited number of pools, because it's very costly to make), created from existing Internet content, all it can produce will always have the same generic look. One or a few examples may look convincing, but the global quality can only drop.
And when I say convincing... if you look closely at those generated images, there are a lot of artefacts.
Those new graphics will become dominant because of the technology shift, and will be used to generate the new pools, polluting them. As a consequence, the global quality will drop even further, and nothing original will be added. It's a vicious circle.
I'm not even mentioning the copyright issues, which are already a problem now.
If we're talking about something like textures for castle walls I'm sure a devloper like From Software already has enough of a pool to have a play around generating a few templates to import into photoshop to touch up.
The reason I say it can't decrease the quality of games is because no one is going to use something that's worse. Users are very aware of things like asset flips and other scammy practises.
I say yes, AI will eventually impact the development process in some way which will be a shift in the industry but I don't think it will be similar to a shift like the shift to 3D in the 90s where publishers were demanding everything be 3D, even though it was horrible, low poly 3D, just because it was the new trend or how Baldurs Gate had to be real-time because Diablo was so popular. You're still just making a texture and to the user they don't care how it was made, only that it looks good.
Again, I don't think it's too early to say whether the net result will be negative because people won't use something that looks worse.
I don't think it will improve peoples jobs. The boss won't like it if texture artists turn on the AI and go AFK down to the pub for a few hours. It's just another software tool. They'll still be working the same hours, etc.
You should have seen the face I made when I read Sir James' contention that AI would lead to better NPC dialogue.
I'll bet it was hillarious!
Imagine disagreeing with me, though.
Being able to speak naturally to an NPC and have a real conversation is infinitly better than having 4 or 5 canned responses which sound nothing like what you'd personally say. The process to convince an NPC to give you the information you need will be an open book instead of something like option 1, 1, 3, 1, 5. You don't just read the options and then pick the obvious one. You actually talk.
It's sort of like going back to a prompt system from something like Ultima IV only instead of it just looking for keywords like job or join it actually lets you say anything you want.
Let's see the face you make in 10 years when the technology has advanced. Let's see it in 100 years, 1000 years. AI will lead to better NPC dialogue.