They can only expand on human creativity.

The real question is: Is human creativity a bounded problem or not. Meaning, if AI knows all the creative desires of every single human on earth, can it go beyond that or does it plateau?

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Seems to plateau. Have you seen that YouTube video about ChatGPT completely unable to draw glass of wine filled to the brim? None of the training data has ever seen such a thing, so it couldn't figure out how to do it.