On top of that I doubt every country can afford to give everyone free money. US maybe can for their own citizens but will they give money also to e.g. Malaysians? (they currently do a lot of hollywood vfx and postproduction). I highly doubt that and there is only US, China and maybe France in AI race game right now.
Money is an abstraction. If AI can't produce enough value to support humans, then clearly there's stuff humans value that AI can't do. If AI can produce enough value to obsolete human labor, then human labor is unnecessary and money need not represent it
Money will survive. We humans don't just use it for physical goods. Think about all the monetary exchanges where no physical or virtual goods are exchanged. In Japan, you can rent a friend. An example of an out-of-the-ordinary transaction. Yea, you may be able to have an AI but I'm sure there will be stuff it won't be able to fulfill.
I agree that this is a more likely path for the human economy to take, and one that would disproportionately benefit from people being able to operate independently, as if stuff like social companionship become the kinds of things humans value in each other, and money is exchanged on that basis, the existence of a class of people who can be compelled by desperation to that kind of service seems kind of rife for abuse to say the least, and not really fruitful to let people hoard wealth to an indefinite degree.
That said, any future economy in which humans value services from each other (in a monetary sense) is one in which humans have not been outcompeted by AI in all possible value-generating endeavors, so by some people's standards it might negate the premise that "AI has replaced all human labor"
Either way, if people really believe something like "AI is obviating the contributions of humans in a way that will eventually increase to 100%" I think it's kind of hard to justify an equilibrium where no one does anything an AI can't do better but we still have societal losers who can't do anything to better their station and don't have autonomy and security. I think no loser in that scenario is likely to accept it, so we're talking about either killing or enslaving a whole lot of people or doing some "wealth" (whatever that means in a post-scarcity world) redistribution
