It is true AI, it's just not AGI. Artificial General Intelligence is the sort of thing you see on Star Trek. AI is a much broader term and it encompasses large language models, as well as even simpler things like pathfinding algorithms or OCR. The term "AI" has been in use for this kind of thing since 1956, it's not some sudden new marketing buzzword that's being misapplied. Indeed, it's the people who are insisting that LLMs are not AI that are attempting to redefine a word that's already been in use for a very long time.

You can see this when chat bots keep giving the same 2 pieces incorrect information. They have no concept of they are wrong.

Reminds me of the classic quote from Charles Babbage:

"On two occasions I have been asked, – "Pray, Mr. Babbage, if you put into the machine wrong figures, will the right answers come out?" ... I am not able rightly to apprehend the kind of confusion of ideas that could provoke such a question"

How is the chatbot supposed to know that the information it's been given is wrong?