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This paper analyzes whether generative artificial intelligence (AI) empowers or replaces workers by endogenizing the sequencing of innovation between task creation and automation. We develop a dynamic model in which firms invest in task creation, which expands labor-performed activities, and automation, which reallocates existing tasks to machines. Firms optimally switch from task creation to automation at a unique and irreversible time. This sequencing generates rising wages early on and declining wages later, while productivity increases throughout, producing an endogenous wage–productivity gap. We further derive a welfare-based, stage-contingent innovation policy, showing that uniform interventions are inefficient.