I really can't take him seriously after that remark. No, language models are of course artificial intelligence, they are systems so impressive that they were considered decades away before GPT-3 released a few years ago, or, to most, even before ChatGPT, just one year ago. They of course aren't precisely the classical SciFi intelligence that Stross and his colleagues had in mind in the past decades, but that speaks against them, not against the status of language models as AI.
By the way, a better SF writer, Stanisław Lem, did predict something similar to language models: Systems that would read novels of one author and then produce similar novels as output. Basically an LM without fine-tuning.
What Stross does is the classic goal-post moving, where anything more narrow than human intelligence is ultimately dismissed as not real AI. As an added bonus, he lampoons concerns about such "real" AI scaling to superintelligence as being totally speculative. Basically, either it's not real or it's just irresponsible speculation, simple, case closed!