AI has always been a "consumer" term... Games have always had various things called "AI", for example.
And, like, what's the point anyway? Refusing to call it AI doesn't change its capabilities, for good or ill. It doesn't change that all of the leading capabilities labs bar FAIR really are aiming to build bona fide general intelligence, and even FAIR is named the Fundamental AI Research lab for a reason.
[1] eg. Pacman's Ghost AI — a totally cogent term for what sums up to a few lines of code and runs on a Z80. Wikipedia: “Each of the four ghosts has its own unique artificial intelligence (A.I.), or "personality": ...”
example: game AI's often have unlimited ammo. But their bullets don't hurt the player much.
Do people just gloss over the ‘artificial’ part of ‘AI’?
Artificial flavorings are both. Artificial limbs are both. Artificial turf is both. Artificial intelligence is faked, manufactured intelligence.
That's describing faked intelligence, not artificially created (actual) intelligence. It's using cheats that kinda look like intelligence if you don't know what's really going on.
Artificial turf is actually a good example itself - it's plastic (or other materials), it's fake grass. Artificially created grass would be more like https://www.discovermagazine.com/planet-earth/genetically-mo...
Quick edit with another example using terms we already have: An android is a fake human, while a clone is an artificially created human.
So 'artificially created' things are not automatically 'artificial'. They're only 'artificial' if the artifice is still apparent in the end result. If they aren't real.
So my point: if we're describing something as 'artificial' intelligence, we should expect it to be a fake substitute for real intelligence, that has been manufactured to serve that purpose.
If you said you had 'artificially created intelligence', that is a different - and much bigger - claim than that you have 'created artificial intelligence'. Much like if you said you had 'artificially created life' that is a much bigger claim than that you have 'created artificial life'.
And my point is that I don't think most people are reading it that way. We're in a hype cycle where people are treating it like true general AI, like you'd see in sci-fi, instead of what it is: fake/simulated intelligence.
I think you're putting too much weight on the components of a term, instead of seeing the term as a whole.
First-person shooter? You're certainly correct. No reason AI can't get headshots 100% of the time and have zero reaction time to the player coming into view.
Strategy games like Civilization? On hard difficulties, it's well-known that AI cheats. Probably because developing AI for a strategy game is pretty damn hard.
I have no idea what it does but my Sony has some AI sprinkled in it somewhere. Meanwhile, I just need a big dumb display