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Yeah I think people are always going to be seeking out something that's real, even if it's just to hate. (Celebrity culture has taught me that people love to hate other people). Well, of course, you can have an AI-generated person be controversial and racist, too, if that's what people want.
I suspect there's going to be an arms race around generating/detecting what is real.
We'll have social media celebrities which pretend to be real but are actually AI-generated. This will give Internet detectives plenty of material to work with to say "their hand looks a little weird in this one photo" or "notice how they've never posted a video? hmm suspicious" and expose them as being AI-generated. Then AI will get a bit better, and their hand won't look weird in that one photo any more, and they will be in (short, to start with) videos, and the Twitter sleuths will have to work even harder. (But they will never admit to themselves that they actually like the detective work involved in exposing/cancelling people). And the arms race in the social media sphere will escalate.
And then on the Hollywood side, dead celebrities and non-existent people will start making cameos and bit parts, as extras and things. And that will generate some controversy and hate, but people will watch it anyway. And studios will push harder and harder to make bigger and bigger roles for AI actors, seeing how much controversy things will generate, testing the waters, and seeing how many of us will watch it anyway. Maybe at first there will be a lot of mocap and other stuff to help the audience still feel like it's "real", but as the envelope is pushed, we will get more forgiving in what we expect to be "real".
Anyway, I think there will be a chase after people who are real, but I suspect eventually it'll just get too tiring or too difficult for most of us to find real celebrities.
Isn't animated content the precursor for this? Bugs Bunny and Mickey Mouse 'live forever'. We might also take a little from recast characters over time like James Bond, The Doctor, Captain Kirk, Superman...
I guess if we mean actors separate from characters it's a little different. Though I think wr still might take something from Bugs Bunny who's been in various shows, movies etc. And the famous part is the character, you have to be a big Bugs Bunny nerd to know or car about who is doing the voice or animation or writing really. So that might well be where we go - the character is tied to the brand / company that owns it but no particular person.
I don't think there's gonna be a big backlash really. This may make actual actors in movies like the etsy handcrafted stuff vs the knock off brand on Amazon, but both have a market. The "more expensive" real market might well shrink a lot and if you want to be an actor you're back to actual stage performance.