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Karaoke was actually more popular BEFORE AI came out than it is now. So your premise is not supported by reality.
As for it taking away your gigs, it's the same argument people makle that illegal aliens are taking away their job. If you aren't compelling enough to bring in more business from your performance than a Karaoke machine does, who is really to blame? The owners who are in business to make a living (not to be promoters of the arts) or you, the artist who can't justify taking up the commercial space and making it pay off for the owners? If untrained workers who can't even speak the local language can take away a job from a trained American, then perhaps that American needs to be doing a job that is more in line with their actual talent and abilities. And to be clear, I am against illegal immigration.. but I am also against bogus arguments that blame others for their own shortcomings.
Great artists can build followings and fill rooms. If they haven't developed their trade enough to do so, it's up to them to lift their game and gain fans and experience enough to make it a good financial decision for a venue owner to give you the stage and keys to their commercial enterprise. If you can put butts in seats for an evening of drinking and listening to your music, you'll get gigs. If you can't, you aren't ready yet in the first place. No one on the commerce side "owes" the artist community anything. If you want to play ball commercially, then you have to produce like a commercial entity.
AI actually does a pretty good job showing the average person CAN'T sing rather than the opposite. And if it gets more kids excited to try singing instead of something else in life, that's not a bad thing that should be discouraged. Music should be for EVERYONE.. it's part of the human existence.. and we should encourage MORE people to play music and sing and write and be creative and express themselves. And if the amateurs do a better job of entertaining people in a commercial setting than the "pros" then the "pros" need to lift their game or find another way to make money. In the meantime, get up on stage and take your turn at the Karoke mic and blow people away and then sell them your CD and get them out to your next gig. THAT'S how you compete with Karaoke.