Artists and policy makers are concerned that Generative Artificial Intelligence (GenAI) may lead to disappearance of non-GenAI content. In this paper we study the implications of GenAI for the production and consumption of creative goods; such as images, music, and writing. We first introduce a simple model of technology adoption and production that highlights how GenAI may influence market equilibrium. Then, using a difference-indifferences design, we causally estimate the impact of GenAI on production, firm entry, a measure of product quality, variety, and sales. We find that GenAI is a substitute for non-GenAI content, increases competition in markets, and crowds-out the production of non-GenAI content. Overall this leads to an increase in the quality and variety of produced and sold goods, and increased sales. Thus, our results imply that unregulated GenAI poses a substantial threat to non-GenAI production but is likely beneficial for most consumers. We leverage heterogeneity across markets to examine the role of market structures and legal differentiation and labeling in mitigating or enhancing GenAI adoption and influencing market equilibria. Evidence suggests policy that regulates content labeling and enforces clear disclosure can mitigate concerns that poor quality GenAI products may lead to market collapse.