That's why AI means everything and nothing. In games, computer controllwd characters are called AI, although they are straightforward algorithms. It's a catch-all term.

In early 2000s, at least in the academia, we used AI to refer to neural networks, although it wasn't a strict term. Then anything machine learning (including regression models) were called AI, now LLMs and chatbots are called AI while other type of models are pretty much ignored. A boat navigation system could use a neural network but almost definitely not a language model at its core.