The Chinese Room thought experiment is a good place to start the conversation. AI isn't intelligent, and it doesn't hallucinate. Its not sentient. It's just a computer program.
People need to stop using personifying language for this stuff.
I think it's that, and something even worse as well. There are probably many well meaning people working on these things thinking they really are creating and guiding and intelligence. It's an opportunity to feel like a god and a tech wizard at the same time.