A client asked me to use AI to cut my design fee by 60% and I did not know how to respond

I have been a freelance art director for nine years. Last month a long-term client came to me with a new brief and a new expectation. They had seen AI design tools online, they had done some experimenting themselves, and they wanted me to use AI to produce the concepts so they could pay me 60% less for the same deliverable.

I did not know how to respond in the moment so I said I would think about it.

The honest answer is complicated. Yes, AI tools have changed how fast I can produce certain kinds of work. But the part of my job that takes time is not moving pixels, it is the strategic thinking, the understanding of what the client actually needs versus what they say they want, the judgment calls that come from nine years of briefs that did not work. That part has not gotten faster.

How are other creative freelancers handling this conversation? Is there a version of this that works for both sides or is it just a negotiation that someone loses?