AI content generation is on fast track to kill the whole porn industry.
If you think about it, there are already tools that can do pretty convincing face swaps with few clicks and just from one low res photo at whatever angle. Long are gone the times you had to train the models for hours and had to have few hundred photos to just get "okay" fake. Once deepfake video creation becomes this simple, it is game over for porn industry.
Since why would anyone go into porn industry, when they can just use a tool to create lewd content of themselves if they are so inclined to make a living that way? And then it goes the other way around, why would anyone buy it if they can just homebrew it for free.
All in all, it is a good thing. Less exploitation of actual human beings and more power to "consumers". But then there have to be rigid laws against actuall AI porn dissemination, it should be illegal for anything else than private use unless actual consent to be used as source can be proven.
There will always be a difference between generated content and "the real deal". Even if both kinds of content feed into a fantasy, the human made kind has the allure of potentially (however slim the chance is) being with the actors in real life. That will never happen with generated characters.
In the back of the mind there will always be the knowledge that generated content is synthetic and imagining what it would feel like being with an actor is futile, as they don't exist. Which will cement human made content for the group who cares about such things.
That is the Achilles heel of AI. Pinocchio will never be a real boy.
I think it has to be somewhere in between. This 'real deal' theory doesn't explain the popularity of hentai, but at the same time, OnlyFans shows that some people reaaallly care about the personal element. I would bet niche kinks (especially those 'illegal to make but legal to watch'?) will lean heavily on AI for content, but the rest will probably change based on our culture's attitude toward AI in general.