Obviously a lot of money will be lost for artists in a variety of commercial fields, but the ultimate "success of art" will be unapproachable by AI given its subjective nature.
Developers though will be struggling to compete from both a speed and technical point of view, and those hurdles can't be simply overcome with a shift in how someone feels. And you're right about the arms race, it just won't be happening with humans. It'll be computing power, AIs and the people capable of programming those AIs.
We developers are hired because our coworkers can’t express what they really want. No one pays six figures to solve glorified advent of code prompts. The prompts are much more complex, ever changing as more information comes in, and in someone’s head to be coaxed out by another human and iterated on together. They are no more going to be prompt engineers than they were backend engineeers.
I say this as someone who used TabNine for over a year before CoPilot came out and now use ChatGPT for architectural explorations and code scaffolding/testing. I’m bullish on AI but I just don’t see the threat.
In art these parts are often overlooked, but they are significant none the less. E.g. getting the proportions right is an objective metric and really off putting if it is wrong.
And in programming the "art" parts are often overlooked and precisely the reason why I feel that most software of today is horrible. It is just made to barely "work" and get the technical parts right up to spec and that's it. Beyond that nobody cares about resource efficiency, performance, security, maintainability or yet alone elegance.