I personally can see non-gamers/players could easily get confused when AI got mentioned for games.
Certainly, though they would likely imagine much much more at the mere mention of AI.
"We use AI to assist us in the management of the dock" - well, that, too, is no AI, really...
As I have seen non-gamers asking "Why not use AI there or there to improve xyz or to cure this and that?"
Though, it is also often times difficult to find a fitting word, especially in the spur of the moment, when attempting to describe something more difficult to someone with no prior experience/knowledge, especially when other more fitting terms would likely be quite "specific" and topic-related, leaving the other person who probably never even heard the word with not even a thought of understanding.
(Same when a doctor tells me I have this or that and just think "aaaaand that means?"

Yes, when it comes to names of illnesses or whatnot, I am an absolute newborn... I just can't remember them - and that's also why I certainly won't be a doctor (Thank god, I'd spout so much bullshit otherwise - still am, but it'd cause even more harm then...)
The term usually goes around within Game Developing circle, since NORMAL players don't actually get involved on creating that asset.
While not involved in creation of it, there's quite a few games that utilize the term AI.
For example PvP strategy games with the option of "AI" players (essentially singleplayer, or similar)
Although I do have to admit it has been a while since I last played any new strategy games that focus on multiplayer and such.
Though, there are also games which refer to them as "Computer" instead, so there's that too.
Nevertheless, in various gaming communities (not development, but playing) there's still lots of mentions of "AI", although certainly less over the years (often times intending to talk about the Pathfinding or similar, but still)