No, the correct word is hallucinating. That's the word everyone uses and has been using. While it might not be technically correct, everyone knows what it means and more importantly, it's not a $3 word and everyone can relate to the concept. I also prefer all the _other_ more accurate alternative words Wikipedia offers to describe it:

"In the field of artificial intelligence (AI), a hallucination or artificial hallucination (also called bullshitting,[1][2] confabulation,[3] or delusion[4]) is"