Looking for a Phillip K. Dick Story Mentioned on Chapo

I can't for the life of me find this novel or story by searching the internet using what I remember Will saying about it. But I'm hoping someone here might remember what I'm talking about.

A Chapo episode that was maybe 5-15 months ago included something about AI, and Will went into a pretty lengthy description of a Phillip K. Dick novel or story it reminded him of. In the story benevolent aliens land on Earth, and they're willing and able to essentially make a copy of any objects humans present them with. Because of this humanity basically stops producing anything any other way, from chairs, to wheat, to machine parts. But eventually it becomes clear that the alien copying has a xerox effect, where copying things that were themselves copies produced by the aliens yields a slightly worse result. Humanity realizes this too late, at a time when no one is alive who really knows how to make anything without the aliens, and now the alien copy productions are basically just falling apart or dissolving into sand or something. So humanity has to basically re-start the tech-tree from scratch.

I'm sure I got some major details wrong, but that's as best as I can remember the plot summarized by Will on an episode. Does anyone know the title or have suggestions for other places I could ask? I've done some extensive web searching trying different parts of this, different modifiers, etc.