So, what do you get when you remove most/all consumption from the economy and are left with just AI?

You get what's in the movie Elysium.

They don't care. To them, the world is doomed anyway. It'll all have to collapse before they can rebuilt it into a better world, so better to accelerate the collapse as fast as possible so they can start sooner on the rebuilding part of the plan. And if you have to break a billion human shaped eggs to make a tech bro wet dream omelet then that's what'll happen because afterwards they say humanity as a whole will be much better off.

It's very cold hearted.

In these people's mind it's always somebody else who is supposed to employ people and pay them salaries.

It's roughly a Tragedy Of The Commons situation: each such individual wants to take without giving, and it is indeed sustainable if only a few do it, but as others see them gaining from doing that, they too want to do it - eventually in aggregate there will be too much extraction for what little production there is to keep up and the whole thing collapses.

This has already been going on with Globalization - notice how in the last 2 decades or so for the average person in wealthy nations it feels that money doesn't go as far and the abundance of shinny toys still fails to make up for a feeling of constant pressure and uncertainty, and how what we are told is the inflation adjusted amount equivalent to a 1960s blue collar worker salary that paid for a house, car and a family of 5 back then, in the present day barelly covers housing.

IMHO, there are already too many with too much power (and, remember, Money is Power) whose relation to Society is purelly extractive, and the political direction in most Western nations, especially the US, is for things to keep on getting worse so it seems we're bound for dystopia.

Why do you think labor is demand capped and not supply capped?

In the short term we're going to see first movers downsize as they scale up artificial labor to maintain status quo production.

But those first movers are going to have effectively dug their own grave when other companies instead keep head counts high but scale up production with the additional support of artificial labor.

So you'll have one company offering their same slate of offerings with the same marketing at 1/10th the labor costs, pocketing the difference. But then their smarter competition will have 10x the variety in offerings with 10x more targeted or niche marketing efforts at the same labor costs.

The companies that prioritize their quarter over their 5 year performance are going to die out.

The greater job loss isn't going to be driven by automation but by outsourcing, which is going to be easier than ever with the ways translation is going to be improved to the point of seamlessness using AI as an intermediary. So no matter what the job a human working from home in the US can do, someone else can do it a lot cheaper elsewhere even when it requires reading and writing a lot of English.

The threat is realistically less "AI can do your job" and more "another human aided by AI will take your job."

If the US government were smart, they'd be investing in nationalized AI as a public utility similar to the USPS and passing laws restricting outsourcing labor or at least taxing/tariffing the labor itself significantly, using the proceeds from both ends of this pincer approach to fund social services or basic income.

Because you're right that draining main street is going to be bad news for progress. But it's not that AI is going to do this inherently. It's a very specific aspect that's going to do this in most cases, with demand for human labor remaining high as production scales up and out.

IDK Wall-E?

I'm not sure this is true, most of recent big tech changes seem to have been driven through a "invest a lot at loss, then monetize" model. So I don't think this relies on demand anymore.

Humans consumers will still exist, and at that point we would have no choice but to facilitate some kind of UBI or else there's going to be a few billion people that aren't going to just sit around and die.