We're choosing to call LLMs (and the little "harness" programs that query them in loops and execute their output) "AI", even though it doesn't make much sense.
Most people are laypeople who have no idea what's on the other side of their fave chatbot page. As far as laypeople are concerned, AI has always been a talking machine. The literature and filmography has reinforced this idea. So as soon as a talking machine emerged, people applied those fictional concepts onto reality.
Tech people should have known better than to jump on this bandwagon.