It's just that, it seems to me that you see AI in a more organic and more generic sense. Something more advanced. A reactive algorithm is a type of artificial primitive intelligence. I also think that more elaborate things will only exist in distant futures. But something simpler, it is possible today in games using some principles that already exist and / or means, tools, that we already have.
I apply the same principle for 'enemy AIs', but for alleged NPCs who don't react like enemies. It is possible to make a database reactive to events linked to the player, to what the player files and, from there, start a dialog. it is something elaborate, it would require time, animations, sound (voices, in this case, I think of another type of AI, tool). Elite Dangerous has it already and works relatively well. In this case, I mean a database related to events in the universe, including a narrative voice (sound) and artificially produced sound.
That's not AI in any sense of the word.
Primitive AI is what some companies have achieved so far. Strangely enough, Facebook achieved something incredible when they created two bots that eventually designed their own language we didn't understand and were speaking to each other. They pulled the plug because they didn't have control over the experiment, thank god.
Reactive scripting and algorithms will never be AIs. They create the illusion of AI and if done well it can be almost indistinguishable but it can always be broken if you think of something the coders didn't think of. Once the code faces something that wasn't coded into it, it'll stop.
Here is an example. Say you're playing CP2077 and you decide to park your car in front of an NPC on the street. Right now that NPC simply does a 180 and goes somewhere else. With reactive coding, that NPCs can choose to walk around or jump over because it's the branches that were offered to it.
With an AI, that AI
knows it can walk and it knows it can jump, it also knows it can draw it's gun and fire on the guy blocking it's way. This would happen the same way it would for a human. It would quickly think of what it can do and then decide what it wants to do. If it wants to go psycho on your ass for blocking it's way, it'll draw it's gun and shoot you. It wasn't offered any branches, it just knows it can do XYZ because it learned it could and it decided it wanted to Y. It doesn't need a code telling it can go 3 different ways, it creates it's own way.
That is real AI. That is what the term AI stands for and always stood for. No game has achieved anything remotely close to real AI. If the action and it's possible reaction aren't coded in, it's not happening. We're far from achieving this and even farther away from home computers that can handle this.
Creating a database of action and reactions is just more reactive coding. X happens - here are branches leading to different reactions. If Y happens while X happens then there is more chances for JKL reactions and so on. It's not AI and it never will be. If well done, it can create a really convincing illusion but it will never be AI.
With that said, there is no doubt that CP2077's NPC are severely lacking even reactive coding.