How does AI make economy better?

How does an AI powered society function? If AI replaces human workers than those workers are left unemployed and with no money, they have no purchasing power. Companies are making employees redundant and using AI to replace them. If a good size of the population, let's say 20% is unemployed then they won't necessarily be spending that money on softwares or subscriptions which would in fact hurt companies revenue. So isn't it all a self cancelling cycle?