The brain understands concepts. I can say, for example, "a penny saved is a penny earned" and understand that I'm talking about money and savings in general. I've felt the satisfaction of a full bank account and the panic of a near-empty one.
The AI knows that someone once wrote the words "a penny saved is a penny earned" in that order. It has ingested volumes of wise sayings and economic texts to facilitate the statistically accurate words which will follow previous words in the conversation.