Branding. LLM’s (as a term!) are too specific for the ‘conquer the world’ narratives the VCs want to justify the high valuations. Machine Learning sounds too technical.
AI is pithy, and can be anything from skynet to… skynet. Or clippy, technically, but everyone seems to have forgotten about him.
FOMO drives the valuation, and the more vagueness and ambiguity you can have, the easier it is to stoke it. And if the option is being part owner of a world conquering, game changing tech - or a victim - which would you choose?
I really like the idea of AI being the brand of whatever we are hyping so much that will inevitably fail spectacularly and turn the entire society against it for a couple of decades.
The name basically means anything a computer can do, and has meant almost anything a computer does at some point. So it's not a very useful word anyway, no loss in letting marketers use it to whatever Tormentus Nexus they are working towards.