  The rise of generative artificial intelligence (AI) has sparked concerns
about its potential influence on unemployment and market depression. This study
addresses this concern by examining the impact of generative AI on product
markets. To overcome the challenge of causal inference, given the inherent
limitations of conducting controlled experiments, this paper identifies an
unanticipated and sudden leak of a highly proficient image-generative AI as a
novel instance of a "natural experiment". This AI leak spread rapidly,
significantly reducing the cost of generating anime-style images compared to
other styles, creating an opportunity for comparative assessment. We collect
real-world data from an artwork outsourcing platform. Surprisingly, our results
show that while generative AI lowers average prices, it substantially boosts
order volume and overall revenue. This counterintuitive finding suggests that
generative AI confers benefits upon artists rather than detriments. The study
further offers theoretical economic explanations to elucidate this unexpected
phenomenon. By furnishing empirical evidence, this paper dispels the notion
that generative AI might engender depression, instead underscoring its
potential to foster market prosperity. These findings carry significant
implications for practitioners, policymakers, and the broader AI community.
