I actually thought (as an outsider) that"ai hallucinations" is a reasonably well defined term of art, rather than something injected by an overzealous journalist in reporting. Am I wrong?
AIs are useful because many (most?) of those hallucinations happen to be useful.
I experienced this very memorably coming back from vacation where there were little lizards seen while walking to and from the beach. When I got back home to my cold climate, I 100% saw a lizard skit across the sidewalk--it was a leaf.
My understanding was that the term as used in the field is fairly well defined as "producing a confident answer that is not backed up / justified by training data". It has nothing to do with sentience or humanness.
AI models are useful precisely because they can interpolate - make guesses that incorporate information from many examples.
And this interpolation is called "hallucination" only when it happens to be a wrong answer?
Parrots are certainly sentient. You could maybe say parrots aren't sapient, but frankly I think we don't know enough about sapience or what it takes to make human-level intelligence to make that claim either.