IMO, he's right. LLMs can't be AI because they don't create a model of observations to predict things, they just imitate observations based on their likeness to each other. When you play Quake, you create a simple model of the game physics and use that fast model to navigate the game. Your equivalent of LLM has a role too: it's a fuzzy detector of things you encounter in the game, sounds, images and symbols, but once detected, those things are fed into the fast and rigid physics model.