You could be right and my statement is speculative/provocative. But I'm far from sure that AI Music would hurt that many small musicians. Please keep in mind that we've seen this story before... Record albums (CDs, cassettes etc), Electronic music and even MIDI were at one point seen as a threat to small musicians but the market only grew as a result.
Is AI a bigger threat to musicians than, let's say, Spotify? That commoditized music to a degree we had never seen before. It would be fair to ask "does the world need ANY music to ever be made again?". To me, the answer is a clear YES, but the amount of music available on Spotify is so mind-boggling (I heard a "1 million new tracks a year" figure somewhere) that it already appears to be impossible for a professional musician to survive. Yet, they do. So there's something off in the assumption that AI will wipe out small musicians.
Spotify pays musicians something, and tracks that go viral pay better and can occasionally lead to break out deals. Spotify may be putting price pressure on musicians, but it still depends on musicians directly. AI music doesn’t. AI doesn’t pay anything and never turns into a publishing deal. I feel like you’re ignoring the chilling effect of the narrative that AI has, and like I mentioned, I think that chilling effect is already happening.