Both be true at the same time: some teams spend a fortune on AI and the AI investments won't get the expected ROI (bubble collapse). What is sure is that a lot of capacity is been built and that capacity won't disappear.

What I could see happening in your scenario is the company suffers from diminishing return as every task becomes more expensive (new feature, debugging session, library update, refactoring, security audit, rollouts, infra cost). They could also end up with an incoherent gigantic product that doesn't make sense to their customer.

Both pitfall are avoidable, but they require focus and attention to detail. Things we still need humans for.