I mean art generated with code. How was the code generated is not implied here. And I don’t mean AI diffusion but code which results in gfx or animation.
Besides - demo scene was not only about performance, never was. Even though the hacker side of it is about it, the aesthetic is not.
In that case, "art generated with code" is the overall umbrella which contains the demoscene, and the AI art scene, and many other scenes. So it's not what the demoscene is turning into, for the same reason you wouldn't say "trees are what apple trees are turning into".